Aggregate demand at current prices shift

Assignment Help Business Economics
Reference no: EM131691690

Suppose the consumption function is C = $500 billion + 0.8Y and the government wants to stimulate the economy. By how much will aggregate demand at current prices shift initially (before multiplier effects) with

(a) A $50 billion increase in government purchases? $  billion

(b) A $50 billion tax cut? $  billion

(c) A $50 billion increase in income transfers? $  billion

What will the cumulative AD shift be for:

(d) The increased government spending? $  billion

(e) The tax cut? $  billion

(f) The increased transfers? $  billion

Reference no: EM131691690

Questions Cloud

How are you going to respond as an employee : How are you going to respond as an employee? Also, does the applicant know the history of the company? What are their goals? Family relationships?
Price of the truck increases exactly in accordance : If the price of the truck increases exactly in accordance with an estimated inflation rate of 6 % per year, how much the truck will cost in 2 years?
Analyze what information did the article suggest business : Analyze what information or data did the article suggest a business owner use to help decide on the best financing decisions?
Identify correct financial statement for junior accountants : Identify the correct financial statement for your junior accountants that will provide the investor with the information it has requested.
Aggregate demand at current prices shift : By how much will aggregate demand at current prices shift initially (before multiplier effects) with
Marginal rate of substitution : His marginal rate of substitution between x and y does not change if the amount of both goods doubles. I am trying to understand why this statement is true.
What is the purpose of a firm : What is the purpose of a firm? As a manager, to what extent should I care about how much my actions are contributing to the welfare of others?
What is cross over point between the two options : Sally's Salads are trying to decide whether to sell premade salads or offer a salad bar. What is the cross over point between the two options?
What is each bidder consumer surplus : The values are private. What is each bidder's optimal bid? Who wins the auction and what price does she pay? What is each bidder's consumer surplus?

Reviews

Write a Review

Business Economics Questions & Answers

  Find investor relations at the bottom of the page

Select a project from IBM’s recent academic collaborations. Describe in a paragraph what this project is. Go back to the IBM front page, find “Investor Relations” at the bottom of the page. Go to IBM’s most recent annual report. How much did IBM spen..

  The competitive rental rate of machines

The competitive rental rate of machines (capital) is the sum of forgone interest and depreciation costs the machine’s owner must pay for one period.  In the case of machines that do not depreciate, the competitive rental rate of machines (capital) is..

  Government should actively pursue an industrial policy

It is sometimes suggested that the government should actively pursue an industrial policy. Explain what this means and discuss the advantages and the disadvantages of such a policy. 2. Suggest four policies to promote growth. How is it related to the..

  Why is money now not the same as money later

Why is money now not the same as money later? Briefly describe two of the roles assigned to interest rates. What determines land rent? Describe one of the key assumptions.

  Potential buyers within segment should be

Potential buyers within a segment should be:

  Explain how much profit will the monopoly firm earn

Explain how much profit will the perfectly competitive firms earn. Explain how much profit will the monopoly firm earn.

  Firms in an oligopolistic market engage in a price war

Suppose that the firms in an oligopolistic market engage in a price war and, as a result, all firms earn lower profits. Game theory would describe this as what?

  Official money lose its meaning in germany

Illustrate why did official money lose its meaning in Germany during the 1920s. What did the German government do or not do.

  What is the present value and future value

If you have four years child by the time he/she turns eighteen and you need a 100,000 for them and the interest rate is 4%. How much you need to save now? What is the present value? Andrew has $500 he put the side $500 semi annual and he planned to k..

  Professor becker corrects president math

President Clinton has seized upon the cigarette excise tax as an expedient and politically correct means of increasing federal revenue.

  Demand or supply for hairdressers when that minimum wage

The market equilibrium wage is currently $12 per hour among hairdressers. At that wage 17,323 hairdressers are currently employed in the state. The state legislature then sets a minimum wage of $11.50 per hour for hairdressers. If there are no change..

  Law of supply economies of scale economies of scope

There is an old saying about the benefits of Marriage - that "Two can live as cheaply as One". What economic principle substantiates this claim? Diminishing marginal returns Law of Supply Economies of Scale Economies of Scope.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd