1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
algol13
3 years ago
7

Suppose a hypothetical economy is currently in a situation of deficient aggregate demand of $16 billion. Four economists agree t

hat expansionary fiscal policy can increase total spending and move the economy out of recession, but they are debating which type of expansionary policy should be used. Economist A believes that the government spending multiplier is 4 and the tax multiplier is 2. Economist B believes that the government spending multiplier is 2 and the tax multiplier is 8.
Required:
Compute the amount the government would have to increase spending to close the output gap according to each economist's belief.
Business
1 answer:
GarryVolchara [31]3 years ago
5 0

Answer:

Economist A

Government spending multiplier $4billion

Tax multiplier $8billion

Economist B

Government spending multiplier $8billion

Tax multiplier $2billion

Explanation:

Computation for the amount the government would have to increase spending to close the output gap according to each economist's belief

ECONOMIST A

Government spending multiplier=16/4

Government spending multiplier=$4billion

Tax multiplier=16/2

Tax multiplier=$8billion

ECONOMIST B

Government spending multiplier=16/2

Government spending multiplier=$8billion

Tax multiplier=16/8

Tax multiplier=$2billion

Therefore the amount the government would have to increase spending to close the output gap according to each economist's belief are :

ECONOMIST A

Government spending multiplier=$4billion

Tax multiplier=$8billion

ECONOMIST B

Government spending multiplier=$8billion

Tax multiplier=$2billion

You might be interested in
"The ownership interest held by the lessor, which includes the right to receive the contract rent specified in the lease plus th
Ivahew [28]

Answer:

Leased Fee Interest

Explanation:

Leased Fee Interest refers to the right of the lessor to lease his property to a tenant and earn rental income in addition to the value of the asset which is reverted back to the lessor upon expiry i.e reversionary right.

The total of leased rental payments and reversionary value is termed as Leased Fee Interest.

A lease is a contract wherein one party i.e the lessor agrees to lend the asset to other party i.e the lessee in exchange of periodic payments in the form of lease rentals usually without transferring the ownership of the asset.  

5 0
3 years ago
We refer to the Federal Reserve as ?<br> “The b... b..”
antoniya [11.8K]

Explanation:

the federal receive the common thing

3 0
2 years ago
Park co. shipped inventory on consignment to recreations co. that cost $50,000. recreations paid $1,200 for advertising that was
antiseptic1488 [7]

The answer to this question is 30/100*$50,000 = $15,000 remains on the balance sheet at the end of the year.

The $ 1200 paid for advertisement is not included in the cost of inventory.

<span>Cost of inventory=cost of inventory+ any other cost needed to get inventory in place of sale.</span>

6 0
3 years ago
The amount of money remaining after deductions are taken out best describes which term?
telo118 [61]
The answer to this question is the term net income. A net income is the remaining money after deductions or expenses have been taken from the gross income. Net income is also known as net profit. Net income also states and calculates the total revenue that exceeds after all operational expenses and taxes been deducted.
4 0
3 years ago
What is meta genetics​
Lera25 [3.4K]

Metagenomics is the study of genetic material recovered directly from environmental samples. The broad field may also be referred to as environmental genomics, ecogenomics or community genomics.

Hope it helped!

5 0
2 years ago
Other questions:
  • An inexperienced accountant for Ayayai Corp. showed the following in the income statement: income before income taxes $250,000 a
    7·1 answer
  • The unauthorized manufacture of any controlled substance, its distribution by sale or possession of such substance with intent t
    10·1 answer
  • On January 1, 2005, Systil Corporation issues $50M 10 year bonds with a coupon rate of 10%. Interest is payable annually at the
    11·1 answer
  • AND is a boolean operator that refines an internet search to include all items in the search field
    7·2 answers
  • _________ is the allocation of resources according to supply and demand.
    12·1 answer
  • You bought a 18-year, 7.2% semi-annual coupon bond today and the current market rate of return is 7.8%. The bond is callable in
    6·1 answer
  • All the following were true of the American economy under Cotton Kingdom EXCEPT a the South reaped all the profits from the cott
    5·1 answer
  • 1. Spratt Company purchased Treasury bond futures contracts when the quoted price was 93-50. When this position was closed out,
    11·1 answer
  • in a printing job, the cost of producing a thousand brochures was GH3500.The publisher decided to sell these brochures at 125% g
    7·1 answer
  • A farmer uses two types of fertilizers. A 50-lb bag of Fertilizer A contains 10 lbs. of nitrogen, 2 lbs. of phosphorus, and 6 lb
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!