Suppose the council of economic advisors
Course:- Business Economics
Reference No.:- EM13891951

Assignment Help
Assignment Help >> Business Economics

Suppose the Council of Economic Advisors (CEA) hired you as an Economist (Economic consultant). The head of the council tells that she believes the current unemployment rate of 9 % is too high. They would like to increase real aggregate output (RGDP) . She wants to know what policy to pursue to increase RGDP by $2 trillion ($2,000 billion) . The best estimate she ga ve you is the value of MPC = 0.8 . Which of the following policies should you recommend and why? You need to show your work of estimations and explain in words. 4 pts a. Increase government expenditure (G) by $400 billion b. Reduce taxes by $400 billion c. Reduce taxes by $400 billion an d increase govt. expenses by $200 billion d. Increase G by $5 00 billion

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Business Economics) Materials
You are the project executive of a monopolistically competitive firm. The present demand curve is P=100- 4 Q. Your total cost equation is C(Q)=50+8.5Q^2 , and MC = 17Q. What l
HomeGrown is a small restaurant that specializes in serving local fruits, vegetables and meats. The company has chosen to enter into a long-term relationship with Family Farms
Purchasing power parity and the law of one price are two related concepts. Explain what is meant by the law of one price. Also explain why a person or nation could profit if t
Rather than the short run effects of decreasing government spending, allow a self correcting economy to bring the model back to equilibrium, the government decides to act to e
Cousin Vinnie is a shareholder and an employee in the family business. The directors have no intention of declaring a dividend and putting cash into the pockets of such a ques
The impact on this monetary aggregate of extensive monetary aggregate of extensive financial innovation - the changes in the kinds of deposits and services offered by banks- l
Why did German leaders support Austria-Hungary's ultimatum to Serbia and its subsequent declaration of war in the wake of the assassination of Archduke Francis Ferdinand in Ju
Informal financial institutions and its system are important in serving the group at the bottom of the income pyramid. Explain the characteristics of informal financial instit