Answer: C. Decrease government spending and increase taxes
Explanation:
The current GDP of this economy is $670 billion and this figure is higher than the $620 billion that the economy should be at.
This means that the economy is in danger of overheating and needs to be adjusted.
To do this one can use option C.
By REDUCING Government Expenditure, government purchases will drop which will aid in reducing the GDP.
By also INCREASING Taxes, the amount of money left for people to consume after they pay their taxes is less so that REDUCES Consumption as well leading to a smaller GDP.
Doing this is known as a CONTRACTIONARY FISCAL POLICY.
Answer:
I will need more information
Explanation:
Answer:
Under a) r=0.1;Id=50;Cd=750;P=7 b) P only changes and is now 9.33
Explanation:
a) In a closed economy national savings are equal to investments or:
S d = I d = Y - Cd - G
Id = Y - 100 - 0.8*Y + 500*r - 0.5*G
100 - 500*r = 0.2*Y -100 + 500*r -0.5*G
200 - 1000*r = 0.2*1000 - 0.5*200=100
-1000*r=-100
r= 0.1
i = 0.15
Id = 100 -50 =50
Cd= 100 + 800 - 50 - 100=750
P = Md/Y-2000 i
P= 2100/1000 -300=7
b) If money supply increases to 2800, the price level would be:
P = 2800/Y - 2000*i = 2800/Y- 2000*(i-inflation)
However, since the variables determining real interest rate remained the same, r is also the same or 0.1 and i is 0.15. Consumption and investment remain the same, only price level changes or:
P=9.33
Answer:
$3500 is deductible
Explanation:
The question is not complete . Please see the solution below :
The Investment Interest expense can be set off against Net Investment income ( Interest income - Investment expenses i.e $25000-$2000=$23000) to the extent and the remaining is carried forward to the next year. so here the investment interest expense is wholly set off against the interest income i.e $3500 is deductible
Answer:
AA-rated revenue bond that is escrowed to maturity.
Explanation:
AA-rated revenue bond that is escrowed to maturity, is the bond recommendation for an individual who seeks income that is free from federal income tax. Escrowed to maturity bond are pre-funded municipal bond and it is backed by the government. The Issuer invests the new bond´s income too high credit securities and also issuer hold proceeds from the new bond issue in a separate escrow account to pay off existing bond when it matures.
