What is the value of the new multiplier

Assignment Help Business Management
Reference no: EM131227206

Suppose we have an economy described by the following [Note: '0' denotes autonomous]

c= 150+0.8YD

Io = 80

Go = 200

TRo = 150

TAo = 50

t = 0.20

a. Calculate the equilibrium level of income and the multiplier in the model.

b. Calculate also the budget deficit?

c. Suppose that t increases to 0.25. what is the new equilibrium income? What is the value of the new multiplier?

d. Calculate the change in the budget surplus that arises of the tax rate increase from 0.20 to 0.25. would you expect the change in the surplus to be more or less if c= 0.9 rather than 0.8?

Reference no: EM131227206

Questions Cloud

Achievement of development goals extending across : Write a research paper on, Grenada faces many challenges, which has led to the uneven achievement of development goals extending across the economic, social and environmental sectors.
Economic effects on bond prices : Economic Effects on Bond Prices: -  Assuming that the economic expansion occurs, do you agree with the analyst's conclusion?
Advise for an upcoming entrepreneur : Why is living below means rather than within your means a best advise for an upcoming entrepreneur?
Determine why organizations can have higher productivity : Determine why organizations can have higher productivity when top managers encourage supervisors to set goals, assess performance, and provide feedback to employees. Support your answer with examples. Then, describe the experience you have had wit..
What is the value of the new multiplier : a. Calculate the equilibrium level of income and the multiplier in the model. b. Calculate also the budget deficit? c. Suppose that t increases to 0.25. what is the new equilibrium income? What is the value of the new multiplier?
Determine the topics that should be covered in the seminar : Imagine you are a new employee in a human resource (HR) department. Your first task is to develop a stress management seminar for the employees. Determine the topics that should be covered in the seminar. Support your selection of the topics.
Link between problems in the middle east and bond prices : When tensions rise or a war erupts in the Middle East, bond prices in many countries tend to decline.-- What is the link between problems in the Middle East and bond prices?
What you found interesting surprising or confusing : Reflect on what you found interesting, surprising, or confusing in this past week. Did anything that you learned cause you to understand an issue and event differently?
What did his theory say : Who was keynes? What did his theory say? Is his theory still used by governments?

Reviews

Write a Review

Business Management Questions & Answers

  Strategy making pyramid

Discuss and explain the four distinct organization levels of the Strategy Making Pyramid for a diversified company.

  Awarding excessive damages in cases

Are juries awarding excessive damages in these cases? How should we decide what is a frivolous lawsuit? Should limits be placed on punitive damages - why or why not?

  A letter from a local public school requesting free passes

A letter from a local public school requesting free passes for their charity auction.

  Unocal corporation study case about

What is the Unocal Corporation study case about? What do you think of the Unocal representative's statement "to withdraw and isolate Burma would have no effect"

  Income gap between men and women

Although we typically focus on the income gap between men and women, Jacobsen notes that there is also a wealth gap between men and women in the U.S. Describe this wealth gap and potential reasons for its existence.

  Generation of relevant hypothesis

Development of problem statements and generation of relevant hypothesis and defining of the research objective

  Different types of thinking styles logical thinker

essential to analyze 3 different types of thinking styles Logical Thinker, Optimistic Thinker, as well as Emotional thinker

  Apply the government failure concepts

The past twenty years have witnessed considerable concern in the United States about the quality of public schooling, particularly in urban areas

  Discuss how change agents may help managers overcome

Discuss how change agents may help managers overcome resistance to change. Discuss consequences to an organization if change resistance is not managed.

  Features you would add to automobile designed for consumers

Describe the new features you would add to an automobile designed for consumers in each of the following generational segments: Baby Boomers, Generation X, Generation Y (Millennials). In what magazines would you advertise to appeal to this target mar..

  Organization and differing organizational cultures

Articulate your vision for this plan and components that are required for its success. How will you justify the expense associated with your plan? Keep in mind that you have a newly formed organization and differing organizational cultures.

  Research paper on cloud computing

Write a research paper on cloud computing. Your paper should be 1-2 pages and should contain a cover page and references.

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