economics homework help

User Generated

Nyrknaqen482

Economics

Description

If the multiplier during a recession is equal to 2, then if the government wants to increase GDP by $500 billion it should increase spending by:

Assuming that there is no government spending or trade, an economy’s aggregate demand is given by its domestic consumption C and investment I, AD = C + I = c0 + c1Y + I.

In the economy’s goods market equilibrium this equals its output: AD = Y. Solving for Y this yields:

Y = [1/(1-c1)] (c0+ I)

Given this equation, which of the following statements is correct?

Assume that in France and Germany, it is not possible for a household to increase its borrowing based on an increase in the market value of their house. In addition, a large down-payment (as a per cent of the house price) is required for house purchase. On the basis of this information, which of the following statements is correct when there is a rise in the house price?

In the US and the UK, loans are widely available based on a rise in home equity. Additionally, unlike in France and Germany where large downpayments (as a percentage of the house price) are required, in the US and the UK only small downpayments are required for house purchases. On the basis of this information, which of the following statements is correct for the US and the UK when there is a rise in the house price?

Given that imports represent a "leakage" out of the economy and reduce the multiplier, if the following countries have the given rates of Imports/GDP which is likely to have the largest multiplier (assuming all else is the same):

table { }

CountryImports/GDP
Belgium82.1
Canada33.4
Denmark46.6
Ireland96.7
Netherlands71.4



Which of the following statements is correct regarding fiscal policy?


Which of the following statements is correct regarding inflation and deflation?







User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Hello,please find the attached answers,in case of any issue please let me know.Looking forward to working with you.Jerry.

If the multiplier during a recession is equal to 2, then if the government wants to increase GDP by $500
billion it should increase spending by:

A. $100
BILLION.
B. $200
BILLION.
C. $250
BILLION
D. $1
TRILLION
Assuming that there is no government spending or trade, an economy’s aggregate demand is given by its
domestic consumption C and investment I, AD = C + I = c0 + c1Y + I.
In the economy’s goods market equilibrium this equals its output: AD = Y. Solving for Y this yields:
Y = [1/(1-c1)] (c0+ I)
Given this equation, which of the following statements is correct?

A.
THE MULTIPLIER IS GIVEN BY 1 – C1.

B.
THE BOOST IN THE ECONOMY’S OUTPUT IS THE SAME WHETHER THE AGGREGATE
DEMAND SHOCK COMES FROM AN INCREASE IN INVESTMENT I OR IN AUTONOMOUS
CONSUMPTION C0.

C.
THE LARGER THE MARGINAL PROPENSITY TO CONS...


Anonymous
Awesome! Made my life easier.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Related Tags