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:
c or a
most economic decisions are made by the central government
the states have all of the authority to make economic decisions regarding businesses that do not operate across state lines
most economic decisions are allowed to occur naturally as a result of market changes made by government intervention
none of the above
all of the above
Answer:
$1,779.90
Explanation:
Formula for finding the amount he has to save, this formula would be used :
Amount = FV / annuity factor
Annuity factor = [(1 + r)^n - 1 / r]
FV = Future value = $5920
n = number of years = 3
i = interest rate = 10.5
Annuity factor = (1.105^3 - 1 ) / 0.105 = 3.326025
$5920 / 3.326025 = $1,779.90
Answer:
$85,000
Explanation:
In the balance sheet, a company records the value of assets at their historical cost. Assets are recorded in the balance sheet at the price that they were acquired. Even if a company has strong reasons to believe that the value of an asset has increased, It cannot adjust its value in the books.
Harper will record the value of the land at $85,000. $93,000 represents the fair value of the property. Harper cannot record the fair value in the balance sheet. The fair value is only used when disposing of the property. The only way of verifying the fair value is by selling the property.