Infrastructure and passes several different tax cuts

Assignment Help Business Economics

Reference no: EM13771592

Start by drawing the Short-Run Aggregate Supply and Aggregate Demand diagram with short-run equilibrium at Price Level = 165 and real GDP = 2750. Next, the following shock hits the economy:

Concerned about an economic slowdown possibly turning into a big recession, the federal government both increases spending on infrastructure and passes several different tax cuts.

Which of the outcomes below could be the new short-run equilibrium after the shock?

1. price level=175; real GDP=3000

2. price level=175; real GDP=2600

3. price level=155; real GDP=2825

4. price level=155; real GDP=2675

Reference no: EM13771592

Questions Cloud

What environmental changes and trends might they have : With oil and tar balls washing up on the Gulf Coast, weddings on the beach became a casualty. The weddings on the beach business evaporated with cancelled orders and local flower shops were on the brink. Lee Kitchens Taylor continues to be devastated..

In a natural monopoly and the average cost : In a natural monopoly, the average cost:

Recouping their investment in technological innovations : In which markets will firms probably have the most difficulty recouping their investment in technological innovations?

Is the obligation of d conditional or one with a period : 1. D (debtor) borrowed 10,000 from C (creditor) at 15% interest per annum payable on December 31. Can D require C to accept payment before December 31?2. D binds himself to give 10,000 to C upon the death of the father of D. Is the obligation of D co..

Infrastructure and passes several different tax cuts : Start by drawing the Short-Run Aggregate Supply and Aggregate Demand diagram with short-run equilibrium at Price Level = 165 and real GDP = 2750. Next, the following shock hits the economy: Concerned about an economic slowdown possibly turning into a..

Demand for housing falls-reducing planned investment : If the demand for housing falls, reducing planned investment by $75 billion, what is the effect on national income and output (GDP) (the consumption function is c = 50 + 0.7 (yd)) Wouldn't this answer just be GDP will be reduced by 75 billion? I am n..

Divided into short-run and long-run measures : Each of the following statements is related to the AD-AS model. Using the labels below, decide whether each statement refers to the aggregate demand curve, the aggregate supply curve, or both. Divided into short-run and long-run measures, which diffe..

Find the volume of the resulting solid : Find the volume of the resulting solid when the region bounded by y=3x^2+5x, y=0, and x=4 is revolved about the x-axis

Decides to increase the federal tax rate : For each of the following scenarios, please decide whether there will be an increase, decrease, or no change in aggregate demand. The United States government decides to increase the federal tax rate by 4% for all earners.

User Account

All Pages