Based on the economic data given, and the fact that the government is running a deficit, the equilibrium GDP will be 336.67.
If government spending is cut to balance the budget, the new level of GDP will be 321.67.
The effect of balancing the budget will be a decrease in GDP and a slower recovery from the recesssion.
<h3>What is the equilibrium GDP?</h3>
This is given by the variable "Y" so we can find the equilibrium GDP by solving for it:
C = 50 + .7(Y – T)
Y = C + I + G - XN
C = Y - I - G + XN
Solving gives:
Y - I - G + XN = 50 + .7(Y – T)
Y - 40 - 35 + 10 = 50 + 0.7Y - 14
Y - 0.7Y = 50 + 40 + 35 - 10 - 14
0.3Y = 101
Y = 101/0.3
= 336.67
<h3>What is the new GDP if government spending is cut?</h3>
Government spending will have to be cut to a size that would make it equal to taxes so government spending becomes 20.
New GDP becomes:
= C + I + G - XN
= ( 50 + .7(Y – T)) + 40 + 20 - 10
= 271.67 + 40 + 20 - 10
= 321.67
Find out more on GDP at brainly.com/question/1384502.
Answer: The best answer is C
Explanation:
C. In towns with healthy central shopping districts, what proportion of the stores in those districts suffer bankruptcy during a typical five-year period?
Supposing that roughly a quarter of stores in a HEALTHY central shopping district is being found out to have suffered bankruptcy during a typical five-year period. This would be an evidence to say that losing a quarter of the stores to bankruptcy is NOT a sign that a shopping district is "unhealthy". In that regards, the records from the other towns would simply show that, DESPITE having a SaveAll, the shopping districts maintained healthy bankruptcy rates.
So, the fact that a quarter of stores in Morganville's central shopping district will likely experience bankruptcy is no cause for alarm. This is what we would expect in ANY healthy central shopping district. Therefore, based on the evidence, there is no reason to expect that opening a Save All will negatively affect the health of the central shopping district.
When the price of a commodity is $11, where 1250 units are being bought and sold in a perfectly competitive market, the market price of the commodity will increase from its original price if the market is monopolized.
<h3>What is a perfectly competitive market?</h3>
In a market where there are less to zero restrictions for entry and exit of buyers and sellers in the market dealing in similar commodities, then such a market is known as a perfectly competitive market.
There is no pricing power in the hands of the buyers and sellers in the market, as there is no minimum or maximum limit on the number of sellers in the market, so the supply is not restricted in such a market.
Hence, it can be concluded that market prices are stable in a perfectly competitive market, and it generally increases in a monopolistic market.
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Answer:
B. A tax that charges more to those with lower incomes
Explanation:
A regressive tax imposes a heavy tax burden on low-income earners. In practice, a tax system that applies a uniform rate regardless of income level is regressive.
Low-income earners use most of their income on basic needs such as food, clothing, and shelter. Any amount deducted from their pay has a significant impact on their ability to spend on these basic items. On the other hand, high-income earners will continue living comfortably even if a percentage of their income is deducted as tax. Due to their high income, a percentage deduction does not affect their lifestyle.
A regressive tax causes financial strain on low-income earners but has no impact on the wealthy. It is contrasted by a progressive tax system, which imposes tax depending on the income le
