« previous next »

Author Question: If an economy experiences a 0.8 trillion increase in investment resulting in an increase in real GDP ... (Read 126 times)

Jramos095

  • Hero Member
  • *****
  • Posts: 528
on: Jun 29, 2018
If an economy experiences a 0.8 trillion increase in investment resulting in an increase in real GDP from 10 trillion to 12 trillion,
 
  a. what is the change in equilibrium expenditure?
  b. what is the change in autonomous expenditure?
  c. what is the multiplier?
  d. how would an increase in the marginal tax rate effect the multiplier?

Question 2

If the real interest rate is less than the equilibrium real interest rate, there is a ________ of loanable funds, and ________.
 
  A) shortage; savers increase their saving supply to restore the equilibrium
  B) shortage; borrowers have an easy time finding the funds they want
  C) surplus; some borrowers cannot find the funds they want
  D) shortage; some borrowers cannot find the funds they want
  E) surplus; borrowers have an easy time finding the funds they want


vickybb89

  • Sr. Member
  • ****
  • Posts: 347
Reply #1 on: Jun 29, 2018
Answer to Question 1

a. The change in equilibrium expenditure is 2.0 trillion.
b. The change in autonomous expenditure is 0.8 trillion.
c. The multiplier is 2.5.
d. An increase in the marginal tax rate decreases the size of the multiplier.

Answer to Question 2

D


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Cutaneous mucormycosis is a rare fungal infection that has been fatal in at least 29% of cases, and in as many as 83% of cases, depending on the patient's health prior to infection. It has occurred often after natural disasters such as tornados, and early treatment is essential.

Did you know?

Serum cholesterol testing in adults is recommended every 1 to 5 years. People with diabetes and a family history of high cholesterol should be tested even more frequently.

Did you know?

Aspirin may benefit 11 different cancers, including those of the colon, pancreas, lungs, prostate, breasts, and leukemia.

Did you know?

Persons who overdose with cardiac glycosides have a better chance of overall survival if they can survive the first 24 hours after the overdose.

Did you know?

The first monoclonal antibodies were made exclusively from mouse cells. Some are now fully human, which means they are likely to be safer and may be more effective than older monoclonal antibodies.

In 2008, the U.S. economy suffered a gaping wound as several trillion dollars were ripped out of it. In 2008, the U.S. economy suffered a gaping wound as several trillion dollars were ripped out of it.
Reaction 1: The First ATP Investment Reaction 1: The First ATP Investment
Modern machinery has helped farmers increase yields Modern machinery has helped farmers increase yields
Effect of Increasing the Investment Rate on the Steady State Effect of Increasing the Investment Rate on the Steady State
Determine the # of real roots from the equation Determine the # of real roots from the equation
How high a hill would a 75-kg hiker have to climb to increase her gravitational potential ... How high a hill would a 75-kg hiker have to climb to increase her gravitational potential ...
Video: Interpreting a cladogram Animation

For a complete list of videos, visit our video library