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20 Jun 2022
C = 0.8(DI) + 1000 C = Consumption expenditure, DI = Disposable Income I = 5000 I = Investment expenditure G = 3000 G = government expenditure X = 2000 X = spending on exports M = 1800 M = spending on imports DI = Y - T Y = real GDP, T = tax revenues/> T = 3000
Which of the following increases equilibrium real GDP by $2000
Note: you should use the expenditure multipliers from class to get your answer.
a. increase in government expenditure (G) by $2000 and pay for it by raising taxes (T) by $2000
b. increase government expenditure (G) by $2000 and pay for it by borrowing money
c. increase taxes (T) by $2000
d. decrease taxes (T) by $2000
e. all of the above
f. none of the above
C = 0.8(DI) + 1000 | C = Consumption expenditure, DI = Disposable Income |
I = 5000 | I = Investment expenditure |
G = 3000 | G = government expenditure |
X = 2000 | X = spending on exports |
M = 1800 | M = spending on imports |
DI = Y - T | Y = real GDP, T = tax revenues/> |
T = 3000 |
Which of the following increases equilibrium real GDP by $2000
Note: you should use the expenditure multipliers from class to get your answer.
a. | increase in government expenditure (G) by $2000 and pay for it by raising taxes (T) by $2000 | |
b. | increase government expenditure (G) by $2000 and pay for it by borrowing money | |
c. | increase taxes (T) by $2000 | |
d. | decrease taxes (T) by $2000 | |
e. | all of the above | |
f. | none of the above |
21 Jun 2022
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