Business, 30.03.2021 17:40 carlo123

An economy is operating with output $50,000,000 below the natural rate of output. Fiscal policy makers want to close this recessionary gap. The central bank agrees to adjust the money supply to keep the interest rate constant, so there will be no crowding out. The marginal propensity to consume is 0.75, and the price level is completely fixed in the short run. 1. How much would government spending need to increase (use a negative number if it needs to decrease) to restore the economy to full employment?
2. How much would taxes need to increase (use a negative number if it needs to decrease) to restore the economy to full employment?

Answers: 3

Show answers

Another question on Business

Business, 21.06.2019 14:40

Which one of the following is a characteristic of a jit partnership? a. frequent deliveries in large lot quantities b. removal of incoming inspection c. third-party logistics never used d. maximal product specifications imposed on supplier e. active pursuit of vertical integration

Answers: 3

Answer

Business, 21.06.2019 18:20

Uppose the book-printing industry is competitive and begins in a long-run equilibrium. then hi-tech printing company invents a new process that sharply reduces the cost of printing books. suppose hi-tech's patent prevents other firms from using the new technology. which of the following statements are true about what happens in the short run? check all that apply. hi-tech's average-total-cost curve shifts downward. hi-tech's profits increase. the price of books remains the same. hi-tech's marginal-cost curve remains the same.

Answers: 1

Answer

Business, 22.06.2019 08:40

Which of the following is not a characteristic of enterprise applications that cause challenges in implementation? a. they introduce "switching costs," making the firm dependent on the vendor. b. they cause integration difficulties as every vendor uses different data and processes. c. they are complex and time consuming to implement. d. they support "best practices" for each business process and function. e. they require sweeping changes to business processes to work with the software.

Answers: 1

Answer

Business, 22.06.2019 11:00

Down under products, ltd., of australia has budgeted sales of its popular boomerang for the next four months as follows: unit salesapril 74,000may 85,000june 114,000july 92,000the company is now in the process of preparing a production budget for the second quarter. past experience has shown that end-of-month inventory levels must equal 10% of the following month’s unit sales. the inventory at the end of march was 7,400 units.required: prepare a production budget by month and in total, for the second quarter.

Answers: 3

Answer

You know the right answer?

An economy is operating with output $50,000,000 below the natural rate of output. Fiscal policy make...

Questions