ECON 311 Chapter Notes - Chapter 22: Parsec

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bluemosquito35

27 Feb 2019

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22 addinggovernment4 trade to the simple macro model. Governmentpurchats desired governmentpurchases g arepartof aggregatedesiredexpenditure governmenttransferpaymentsindirectlyaffectsaggregatedesired expenditure indirectbcplacesnodirectdemandon nation"s productionof goods services but affectshouseholds 4firmsspending. Nettaxrevenuesi assumelevelofgovernmentpurchases g is autonomous w respecttothelevelofgdp assumeanychangein g as aresultofgov policydecision taxesd household"sdisposableincomerelativetogdp transferpaymentsindisposableincomerelativeto gdp. Nettaxrevenue t totaltaxrevenue totaltransferpayments alwayspositivebc transferpaymentsltottax revenues assumetvariesdirectlyw levelofgdp. Budgetbalance diffbtwntotgovrevenuedatotgovexpenditure nettaxrate t inc innettaxrevenuegeneratedwhengdpinc by 1 nettaxrevenue govpurchases t g budgetsurplus t g excessofcurrentrevenueovercurrentexpenditure budgetdeficitltcg shortfallofcurrentrevenuebelowcurrentexpenditure provincialdmunicipalgovernments federalgov raisesaroundthesameamountoftaxrevenueas theprovincial4municipalgas combined whenmeasuringoverall contributionofgovtodesirea aggregateexpenditure alllevelsofgov mustbeincluded government federaltmunicipal1provincial1 territorialgov. Netexports exportsdependonspendingdecisionsbyforeignhouseholds firms typicallyexportsareautonomous4donotchange w changes in canadiannationalincome importsareinducedbctheydependonthespendingdecisionsof canadian households firms. Im my marginalpropensitytoimportcm amountthatdesiredimportsincwhengddinc by 1 netexports nx x im x my exportsare autonomous urrespecttoy importsarepositivelyrelatedy toy r netexportsare negativelyrelatedto y shiftsinthenetexportfunctimi foranygivennetexportfunctionassumeeverything affectingnetexportscexceptdomestic. 1 a run tix anythingaffectingcanadianexportsshiftsnxtuneparallel anythingaffectingproportionofincomethat canadianswantto spendonimportschangestheslopeofthenx function changesinforeignincome. Aforeignincome aquantityofdemandofcanadiangoods byforeigncountries r canadianexports xcurveshifts up nxfunctionshiftsupparallely changesininternationalrelativeprices causesbothexports importstochange. C it mi il t 4 c autonomousconsumption mpc mpcoutofdisposableincome yd consumption intermsofyb consumption intermsof y.

Related Questions

A)What are government's fiscal policy options for ending severe demand-pull inflation?
B) Use the aggregate demand-aggregate supply model to show the impact of these policies on the price level.
C) Which of these fiscal policy options do you think might be favored by a person who wants to preserve the size of government?
D) A person who thinks the public sector is too large?

silverhippopotamus876

Assume that the equations below describe the expenditures within a particular macroeconomy and that these equations conform to the assumptions we've made in the lecture regarding the fixed price level Aggregate Expenditure model. All values for expenditure and income are dollar amounts, but for simplicity, we've dropped the $ below.

C = 0.8(DI) + 1000	C = Consumption expenditure, DI = Disposable Income
I = 2000	I = Investment expenditure
G = 1000	G = government expenditure
X = 1600	X = spending on exports
M = 1800	M = spending on imports
DI = Y - T	Y = real GDP, T = tax revenues/>
T = 1000
Yp = 12000	Yp = Potential GDP

Given the equations above, we can describe the GDP, government budget, and net exports in this economy. Select three characteristics from the list below which accurately describe this economy. Note that there is no partial credit on this question. I.e., your answer will either be all correct, or all wrong.

	a.	inflationary gap
	b.	recessionary gap
	c.	no output gap
	d.	government budget surplus
	e.	government budget deficit
	f.	balanced government budget
	g.	trade deficit
	h.	trade surplus
	i.	net exports of zero

pucearmadillo585

8. What did pre-Keynesian believe about the market and its ability to pull itself out of a recession?

12. What are the relations between government spending, the marginal propensity to consume, the marginal propensity to save, and the multiplier effect?

13. What are some of the problems with using fiscal policy in an effective manner?

18. What is the new classical approach to the stimulatory impact of fiscal policy implemented through deficit spending?

22. What approach to the money supply do those embracing monetarism suggest?

24. How do shifting price levels impact debtors and savers?

25. Can you use aggregate demand/ aggregate supply analysis to understand and explain the impact of a tax cut?

26. Can you use aggregate demand/ aggregate supply analysis to understand and explain the impact of a tax increase?

27. Can you use aggregate demand/aggregate supply analysis to understand and explain the impact of an increase in government spending?

28. Can you use aggregate demand/aggregate supply analysis to understand and explain the impact of a cut in government spending?

29. Can you use aggregate demand/aggregate supply analysis to understand and explain the impact of an expansionary monetary policy?

30. Can you use aggregate demand/ aggregate supply analysis to understand and explain the impact of a restrictive monetary policy?

32. How does a deficit and large debt influence the economy?

33. What is the relationship between the expansion of the money supply and inflation?

35. How do expectations impact the effectiveness of monetary policy?

36. What restricts the ability of the Fed to purchase U.S. securities?

39. What is the impact of higher interest rates on the value of a currency and a nation%u2019s net exports?

41. Why do countries willing lend the U.S. government money despite the relatively large debt to GDP ratio of the United States?

42. How does trade contribute to growth?

44. How does the relative size of government contribute to growth?

47. Do High Income countries always grow at a faster pace than lesser developed countries?

48. How do high levels of inflation effect growth?

49. Can you identify the amount of growth in an economy by using the percentage change formula?

50. What countries are presently experiencing high rates of economic growth?

amethystgerbil16

ECON 311 Chapter Notes - Chapter 22: Parsec

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