Short-run after the increase in government purchases, Macroeconomics

Assignment Help:

Assume the marginal propensity to consume = .8, and government purchases increase by $.2 Trillion.

1. Potentially, how much will real GDP increase in the short-run after the increase in government purchases?

2. Besides government purchases, what and how much did another spending category increased due to the multiplier described above? Explain?


Related Discussions:- Short-run after the increase in government purchases

plot the aggregate demand, The economy of Mainland has the following aggre...

The economy of Mainland has the following aggregate and aggregate supply schedules:                               Real GDP Demanded                         Real GDP Supplie

Marginal tax rates imposed on individuals and families, Compared with the s...

Compared with the situation before 1981, the marginal tax rates imposed on individuals and families with high incomes are now lower. What was the top marginal personal income tax r

International trade, developing countries benefit through international tra...

developing countries benefit through international trade from developed countries

Revealed preference approach, REVEALED PREFERENCE APPROACH The downward...

REVEALED PREFERENCE APPROACH The downward slope of the demand curve was justified on the basis of utility derived by the consumer. But specification of consumer tastes in form

Compute the gain and directivity of the antenna, An antenna in free-space d...

An antenna in free-space driven by current Io radiates far-field E as: for 0 ≤ Φ ≤ π, here C = constant = 0 everywhere else a) Compute the power density, b) Compute t

Cobb-douglas production function, Consider an economy characterized by the ...

Consider an economy characterized by the following Cobb-Douglas production function: Y=4K 1/4 L 3/4 Where K and L represent physical capitaland labor, respectively. Assume t

Illustrate the about term the open economy in short, Illustrate the about t...

Illustrate the about term the open economy in short. The Open Economy: a. A closed economy is an economy which does not trade goods-services as well as assets. b. The Uni

How internal resources important, Why is it important to study the internal...

Why is it important to study the internal resources, capabilities, and activities of firms? What insights can be gained?

National income, briefly explain any five uses of national income statistic...

briefly explain any five uses of national income statistics

Cumulative external cost of production, A textile mill releases pollution i...

A textile mill releases pollution into nearby wetlands, and the associated health and ecological damages are not considered in the private market. Suppose you observe the following

Write Your Message!

Captcha
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