Suppose the consumption function is c 400 billion 0.8y, Ask an Expert

Economics

Suppose the consumption function is

c = $400 billion + 0.8y and the government wants to stimulate the economy. By how much will aggeregate demand at current prices shift initially (before multiplier effects) with

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

(b) A $50 billion tax cut?

What will the cumulative AD shift be for

(d) The increased G?

(e) The tax cut?

(f) The increased transfers?

View complete question

Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M9465202

Have any Question?Write your Review or question?

Related Questions in Microeconomics

Question the english and the vickrey auction are

Question: The English and the Vickrey auction are strategically equivalent, and the revenue for the seller is the same. Yet, in terms of the information received by the seller/auctioneer they are different. What is this ...

Question the market demand for stuffed rabbits is q 2600 -

Question: The market demand for stuffed rabbits is Q = 2,600 - 20P, and the government intends to place a $4 per bunny tax on stuffed rabbit purchases (tax collected from sellers). Calculate the tax incidence and deadwei ...

Question this question is about the baumol-tobin model for

Question: This question is about the Baumol-Tobin model. For this question, state your answers in terms of income (Y), money holdings (M), interest (i), Number of trips to the bank (N), and cost of trips to the bank (F) ...

Question consumer reports has hired you to study gas

Question: Consumer Reports has hired you to study gas mileage obtained by the new Federico Fellini Fuel-Efficient Ferrari. Specifically, you are asked to test the manufacturer's claim that, on aver-age, the car travels 3 ...

Question regarding separation of ownership and control a

Question: Regarding separation of ownership and control, A major change in most corporate policies requires that a majority of stock shares that are voted favor it. Would you prefer that approval by a smaller (or possibl ...

Question using the mid-point formula found on page 116

Question: Using the mid-point formula found on page 116, determine whether the following goods are elastic, inelastic or unit elastic: Price quantity demanded $12 50 $10 70 $8 80 $6 95 1. price goes from 12 to 10 2. pric ...

Question the us postal service has been raising postal

Question: The U.S Postal service has been raising postal rates on a regular basis. The service had been losing money. One of the reasons is increased competition from companies such as United Parcel Service and Federal E ...

Question assume that in long-run equilibrium the minimum

Question: Assume that in long-run equilibrium the minimum point of the LRAC curve for a table manufacturer's tables in $200 per table. Under conditions of monopolistic competition, will the long-run price of a table be a ...

Question in the grim trigger example of the text show that

Question: In the grim trigger example of the text, show that if the discount rate is low enough it pays the potential cheater to adhere to the agreement for two (or more) periods rather than break it in the first period. ...

Question microeconomic theory argues that it economically

Question: Microeconomic theory argues that it economically rationale (and profitable) to sell additional output as long as the price covers the variable costs of production. How is this relevant to the determination of w ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Microeconomics Expert