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GDP 10000 9500 9000 8500 8000 7500 7000 6500 6000 5500 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Hypothetical Timeless Economy Cons 6500 2000 6200 1900 5900 1800 5600 1700 5300 1600 5000 1500 4700 1400 4400 1300 4100 1200 3800 1100 3500 1000 3200 900 Imports Savings Taxes1 Investment Govt 2900 800 2600 700 2300 600 2000 500 1700 400 1400 300 1100 200 100 0 800 500 a) 8000; 1.25 b) 8500; 1.333 1600 1500 1400 1300 1200 1100 1000 900 c) 8500; 1.666 d) 10,000; 4.1666 800 700 600 500 400 300 200 100 0 -100 -200 -300 -400 1900 1800 1700 1600 1500 1400 1300 1200 1100 1000 900 800 700 600 500 400 300 200 100 0 -100 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 2100 2100 1. The stable equilibrium when Government Spending is equal to 2100 billion is a) 7000; 1/2 b) 7500; 2/5 c) 7500; 3/5 d) 8500; 3/4 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 GovtSp2 Exports 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 TotslSpending1 Total Spending2 2. If Direct Government Spending were increased from 2100 to 2700, then the new stable equilibrium would be would be the leakage rate is equal to and the income multiplier

GDP 10000 9500 9000 8500 8000 7500 7000 6500 6000 5500 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Hypothetical Timeless Economy Cons 6500 2000 6200 1900 5900 1800 5600 1700 5300 1600 5000 1500 4700 1400 4400 1300 4100 1200 3800 1100 3500 1000 3200 900 Imports Savings Taxes1 Investment Govt 2900 800 2600 700 2300 600 2000 500 1700 400 1400 300 1100 200 100 0 800 500 a) 8000; 1.25 b) 8500; 1.333 1600 1500 1400 1300 1200 1100 1000 900 c) 8500; 1.666 d) 10,000; 4.1666 800 700 600 500 400 300 200 100 0 -100 -200 -300 -400 1900 1800 1700 1600 1500 1400 1300 1200 1100 1000 900 800 700 600 500 400 300 200 100 0 -100 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 2100 2100 1. The stable equilibrium when Government Spending is equal to 2100 billion is a) 7000; 1/2 b) 7500; 2/5 c) 7500; 3/5 d) 8500; 3/4 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 GovtSp2 Exports 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 TotslSpending1 Total Spending2 2. If Direct Government Spending were increased from 2100 to 2700, then the new stable equilibrium would be would be the leakage rate is equal to and the income multiplier

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter32: Macroeconomic Policy Around The World
Section: Chapter Questions
Problem 23CTQ: Demography can have important economic effects. The United States has an aging population. Explain...
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GDP 10000 9500 9000 8500 8000 7500 7000 6500 6000 5500 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Hypothetical Timeless Economy Cons Imports Savings Taxes1 Investment Govt 6500 2000 6200 1900 5900 1800 5600 1700 5300 1600 5000 1500 4700 1400 4400 1300 4100 1200 3800 1100 3500 1000 3200 900 2900 800 2600 700 2300 600 2000 500 1700 400 1400 300 1100 200 800 100 500 0 c) 7500; 3/5 d) 8500; 3/4 1600 1500 1400 1300 1200 1100 1000 900 800 700 600 500 400 300 200 100 0 a) 8000; 1.25 b) 8500; 1.333 c) 8500; 1.666 d) 10,000; 4.1666 -100 -200 -300 -400 1900 1800 1700 1600 1500 1400 1300 1200 1100 1000 900 800 - 700 600 500 400 300 200 100 0 -100 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 1. The stable equilibrium when Government Spending is equal to 2100 billion is, a) 7000; 1/2 b) 7500; 2/5 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 GovtSp2 Exports Tots Spending1 Total Spending2 1000 1000 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 the leakage rate is equal to 2. If Direct Government Spending were increased from 2100 to 2700, then the new stable equilibrium would be would be and the income multiplier
Transcribed Image Text:GDP 10000 9500 9000 8500 8000 7500 7000 6500 6000 5500 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Hypothetical Timeless Economy Cons Imports Savings Taxes1 Investment Govt 6500 2000 6200 1900 5900 1800 5600 1700 5300 1600 5000 1500 4700 1400 4400 1300 4100 1200 3800 1100 3500 1000 3200 900 2900 800 2600 700 2300 600 2000 500 1700 400 1400 300 1100 200 800 100 500 0 c) 7500; 3/5 d) 8500; 3/4 1600 1500 1400 1300 1200 1100 1000 900 800 700 600 500 400 300 200 100 0 a) 8000; 1.25 b) 8500; 1.333 c) 8500; 1.666 d) 10,000; 4.1666 -100 -200 -300 -400 1900 1800 1700 1600 1500 1400 1300 1200 1100 1000 900 800 - 700 600 500 400 300 200 100 0 -100 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 900 1. The stable equilibrium when Government Spending is equal to 2100 billion is, a) 7000; 1/2 b) 7500; 2/5 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 2100 GovtSp2 Exports Tots Spending1 Total Spending2 1000 1000 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 2700 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 the leakage rate is equal to 2. If Direct Government Spending were increased from 2100 to 2700, then the new stable equilibrium would be would be and the income multiplier
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