Business, 12.01.2021 17:50 vittoriochavez9700
The nation of Maximus has a marginal propensity to consume of .90 and the government has decreased taxes by a lump-sum amount of $1 billion. Assume there is no international trade or changes to the aggregate price level.
a. What is the value of the tax multiplier in Maximus?
b. By how much will real GDP change after the $1 billion decrease in taxes?
c. If the government wanted to accomplish the same increase in real GDP you found in part (b), but with government spending instead of taxes, would the government need more than $1 billion in spending, less than $1 billion in spending, or exactly $1 billion in spending? Explain.
Answers: 3
Business, 22.06.2019 21:00
Adecision is made at the margin when each alternative considers
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Business, 22.06.2019 23:50
Jaguar has full manufacturing costs of their s-type sedan of £22,803. they sell the s-type in the uk with a 20% margin for a price of £27,363. today these cars are available in the us for $55,000 which is the uk price multiplied by the current exchange rate of $2.01/£. jaguar has committed to keeping the us price at $55,000 for the next six months. if the uk pound appreciates against the usd to an exchange rate of $2.15/£, and jaguar has not hedged against currency changes, what is the amount the company will receive in pounds at the new exchange rate?
Answers: 1
The nation of Maximus has a marginal propensity to consume of .90 and the government has decreased t...
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