New Semester Started Get 50% OFF Study Help! --h --m --s Claim Now

Question Answers

Textbooks

Find textbooks, questions and answers

Oops, something went wrong!

Change your search query and then try again

Result Not Found

Books FREE
Study Help
Tutors
AI Study Planner NEW
Sell Books

Search
Sign In
Register

study help
business
macroeconomics principles

Principles Of Macroeconomics 8th Edition Sayre, J.E.; Morris, A.J. - Solutions

4.a) If David deposits $240 cash into his chequing account at a commercial bank, has the money supply changed?b) If, later on, David transfers this $240 from his chequing account to a saving account in the same bank, has M1 changed? Has M2?
3. Explain the difference between commodity money and fiat money.
2. Given the clothes/table example above, how many suits of clothes would it cost to buy a table if a litre of beer is worth only one loaf of bread?
1. What do you think Adam Smith might have meant when he said “Money is a veil”?
LO3 Explain how a small amount of cash can support many loans and create more money
LO2 Explain what is and is not money, and describe the main function of modern banks as moneylenders.
LO1 Describe the functions, characteristics, and history of money.
10. (LO 3) Explain the crowding out effect.
9. (LO 3) Explain two sets of circumstances where a balanced-budget fiscal policy would be procylical.
8. (LO 5) Explain how paying off the national debt would redistribute income.
7. (LO 2) What is the primary goal of countercyclical fiscal policy? What are three criticisms of it?
6. (LO 2) Explain some of the problems associated with a countercyclical fiscal policy.
5. (LO 2, 3) Suppose that a federal election is called at a time when the economy is experiencing a recessionary gap and there is a budget deficit. The leader of Party A promises, if elected, to immediately balance the budget by slashing government spending. The leader of Party B promises, if
4. (LO 5) To whom does the federal government owe most of its debt?
3. (LO 1) Define fiscal policy.
2. (LO 5) Complete Table 7.10 for the economy of Smetana.Year Budget Surplus Budget Deficit National Debt GDP Debt/GDP %2010 / / 280 700 2011 / 14 725 2012 323 730 2013 8 / 45.0 2014 310 720 2015 / 6 750
1. (LO 2) Figure 7.14 shows the economy of Tagara. Its aggregate demand is currently AD1 and the budget line is BL1.a) What effect would an increase in government spending have on each of the graphs?In graph A the aggregate demand curve would shift from to .In graph B the budget line would shift
(LO 2, 3) Figure 7.13 shows the aggregate demand/supply and the government budget line for the economy of Mahdi. The economy is presently at equilibrium. For every $1 change in government spending, aggregate demand changes by $3.a) What is the present level of GDP and the price level in Mahdi?
10. (LO 2, 3) Suppose that the government of Malud increases both its own spending and autonomous taxes by $100 and the economy’s multiplier equals 2.5. If consumers spend 80 percent of their disposable (after-tax) income, by how much will GDP change? (Increase/decrease) of $
9. (LO 2, 3, 4) The government of Osiris believes in balancing its budget over a seven-year cycle. Over the first six years, it has maintained its spending at $150 billion and its MTR at 0.25. (There are no autonomous taxes in Osiris.)Column 2 of Table 7.9 shows the level of GDP in each of the
8. (LO 2, 3) The following is information for the economy of Tandor, where taxes are wholly autonomous.C = 40 + 0.8YD where YD = (Y - T) and G = T = 340 I = 100 XN = 107 - 0.1Ya) What is the value of equilibrium income?b) At equilibrium, is there a budget surplus/deficit?How much? (Surplus/deficit)
7. (LO 2) Examine the graph of government spending and net tax revenues in Figure 7.12A.a) Draw the corresponding budget line in Figure 7.12B.b) If government spending were to decrease by 40, draw in the new government spending and budget lines.c) After the change in government spending, what is
6. (LO 3) The following are data for the economy of Moksha.C = 25 + 0.6Y G = 160 I = 60 XN = 55 - 0.1Ya) Calculate equilibrium GDP.b) Calculate the multiplier.c) If the tax function is T = 20 + 0.2Y, calculate the size of the budget deficit or surplus.ofd) Now, change government spending by the
5. (LO 1, 2, 3) The aggregate demand and supply for Cancum are shown in Table 7.8. Potential GDP (LAS) is $1500 billion.a) If the economy is in equilibrium, is the economy experiencing an inflationary or a recessionary gap?How much?b) Suppose government uses countercyclical fiscal policy to close
4. (LO 2) Answer the questions below for the economy of Motak, using the graph in Figure 7.11.a) If GDP is $800 and government spending is G1, what is the size of Motak’s budget deficit?b) If government spending is decreased by the size of the deficit in (a), draw in the new curve, labelled G2 in
3. (LO 1, 2) The economy of Morin is shown in Figure 7.10.a) If potential GDP (LAS) is $540, and the economy is presently in equilibrium, is there an inflationary or a recessionary gap? How much of a gap?b) By how much must aggregate demand increase in order to close this gap?c) If every $1 change
2. (LO 1) Government spending in Robok is $140 billion, and its only tax is an income tax with a marginal tax rate of 0.35.a) What is the balance on the government’s budget at a GDP level of $360 billion?b) What is the balance on the government’s budget at a GDP level of $500 billion?c) At what
1. (LO 1) Table 7.7 shows the revenue and spending of the Canadian government. For simplicity, assume that all of the spending grants to other levels of government were spent in Canada on goods and services.a) What are the projected NTRs in this budget plan?b) What is the value of NTR less
8. Under what circumstances is it inappropriate for government to run up a budget deficit?
7. Suppose that the government increases both its own spending and autonomous taxes by $100 and the economy’s multiplier equals 3. If consumers spend 75 percent of their disposable (after-tax) income, by how much will GDP change?
6. Assume that the economy is in a recession and that government is experiencing a budget deficit. If fiscal policy is used to try to eliminate the deficit, what will happen toa) unemploymentb) GDPc) NTRd) the deficit Next, assume the same conditions, but this time, fiscal policy is used to try to
5. What effect will countercyclical fiscal policy aimed at closing an inflationary gap have on the level of national income and prices?
4. In the following cases, indicate the direction in which the aggregate demand curve will shift (right or left).a) taxes increaseb) government spending on goods and services decreasesc) countercyclical fiscal policy is used to close a recessionary gapd) countercyclical fiscal policy is used to
3. Suppose that government spending is an autonomous$50 and net tax revenues are as shown in the table.Real GDP 0 40 80 120 160 Net tax revenues 20 30 40 50 60 Budget balance Complete the table, and plot the corresponding budget line.
2. Assume that current net tax revenues are $200 billion, government spending on goods and services is $180 billion, and the national debt at the beginning of the period was half the size of current net tax revenues. What is the size of the national debt at the end of the period?
1. Draw a graph similar to Figure 7.3, showing the effect of a decrease in autonomous taxation.
LO5 Discuss the cause, size, and problems of the national debt
LO4 Explain the pros and cons of a budget policy aimed at achieving both full employment and a balanced budget over the life of the business cycle.
LO3 Explain the pros and cons of a budget policy aimed at achieving a balanced budget in each fiscal year.
LO2 Explain the pros and cons of a budget policy aimed at achieving full-employment equilibrium.
LO1 Describe why the federal government’s budget depends on three factors: the rate of taxation, the size of the GDP, and its own spending levels.
10. (LO 4) True or false? Any factor that shifts the AE function also shifts the AD function. Explain.
9. (LO 4) What is the difference between expenditures equilibrium and full-employment equilibrium?
8. (LO 4) The following data provide information on Akinira’s economy in a particular year:Y = $500 Investment spending = $100 Savings = $120 Government spending = $200 Taxes = $180 Balance of trade = +$70a) Explain which variables depend on others.b) Is the economy in equilibrium, and what has
7. (LO 4) Which of the following would increase the value of the multiplier?a) an increase in the marginal tax rateb) an increase in the marginal propensity to savec) an increase in the marginal propensity to consumed) a decrease in the marginal propensity to import
6. (LO 4) Which of the following would lead to a decrease in national income?a) an increase in importsb) a decrease in interest ratesc) a decrease in the money supplyd) an increase in the exchange ratee) a decrease in foreign incomes
5. (LO 3) If the AE curve is relatively flat, what does this suggest about the size of the multiplier? Explain.
4. (LO 3) What four factors will cause a change in autonomous consumption?
3. (LO 2) What is meant by the term expenditures equilibrium?What are the three equivalent ways of expressing it?
2. (LO 4) Explain marginal propensity to import. What is its formula?
1. (LO 1) What is meant by autonomous expenditures?
(LO 4) Table 6.18 shows some of the expenditure amounts in the economy of Arkinia. The MPC, the MTR, and the MPM are all constant, as are the values of the three injections.Comprehensive Problem Please see the Answer Key (on Connect) for the solution to the Comprehensive Problem. An alternative
16. (LO 4) The data in Table 6.17 are for the economy of Nubia.a) Complete the AE column.b) Write out expressions for the tax function, the consumption function (related to national income [Y]), the net export function, and the AE function.T = C =XN = AE =c) Use algebra to find out the value of
15. (LO 4) Table 6.16 shows the parameters for the economy of Hutu.a) What is the value of equilibrium income?b) If exports were to increase by 30, what would be the new value of equilibrium income?c) Given your answer in (b), what is the new value for XN?d) Given the equilibrium income in (a), if
14. (LO 3) Figure 6.14 shows the economy of Itassuna.a) If the value of A is 50 and the multiplier is 4, what is the value of Y2?b) If the value of Y2 is 700 and the value of A is 60, what is the value of the multiplier?c) Given AE1, if the value of the multiplier is 2, what is the value of B?
13. (LO 4) Table 6.15 provides information for the economy of Zawia) What is the value of equilibrium income?b) Set up a balancing row to verify your calculations (the tax equation is T = 60 + 0.2Y and X = 200).Y AEc) If exports decrease by 50, what is the new equilibrium income?
12. (LO 4) Complete the balancing row in Table 6.14 for the economy of Kaniria, which is in equilibrium.
11. (LO 4) The following parameters are for Nirakia:MPC = 0.675 and MPM = 0.175 What are the values of its MPE, MLR, and multiplier?MPE: MLR:Multiplier:
10. (LO 4) In Arkania, income rose by $200 million over the past year. During the same period, tax revenue increased by $40 million, savings rose by $16 million, and imports rose by $24 million. What are the values of its MPE, MLR, and multiplier?MPE: MLR:Multiplier:
9. (LO 4) Suppose that T = 120 + 0.2Y; G = 680; IM =100 + 0.15Y and X = 550.a) What is the trade balance (X - IM) when the government’s budget is balanced? $b) What is the government’s budget balance (T - G) when the trade balance is zero? $
8. (LO 4) The partial data in Table 6.13 are for the economy of Arinaka. Planned investment, government spending, and all taxes are autonomous. Furthermore, you may assume that the MPC, MPS, and MPM are constant.a) Fill in the blanks in Table 6.13.b) What is the value of equilibrium income?c) If
7. (LO 3) Irkania’s aggregate expenditures function is shown in Figure 6.13.a) What is the value of equilibrium income?b) What is the value of the multiplier in Irkania?c) If investment were to increase by $2000, draw in the new AE curve labelled AE2.d) What is the new level of equilibrium income?
6. (LO 2) Suppose that a simple economy has the following parameters:C = 100 + 0.5Y I = 300a) Complete Table 6.12.b) What is the value of expenditures equilibrium?c) What are the values of injections and leakages at expenditures equilibrium?
5. (LO 3) The following are the parameters for the simple economy of Minnerva which has no government involvement and no international trade:C = 240 + 0.68Y I = 440a) What is the value of expenditures equilibrium?b) What is the value of the multiplier?c) If investment increases by 80, what will be
4. (LO 3) The simple economy of Altria shown in Table 6.11 has no government or taxes and no international trade.Its investment is autonomous and its MPC is constant.a) Complete Table 6.11.b) What is the value of expenditures equilibrium?c) What is the value of the multiplier?
3. (LO 1) Figure 6.12 shows the saving function for an economy.a) Complete Table 6.10.b) Add the consumption function to Figure 6.12.
2. (LO 1) Use the information in Table 6.9 to answer questions about the economy of Watis.a) Complete the table assuming that the MPC is constant.b) What are the values of the MPC and MPS?MPC:MPS:c) What are the equations for the consumption function and the saving function?C =S =
1. (LO 4) The economy of Irinika has the following parameters:Autonomous exports = $400 million Autonomous imports = $100 million MPM = 0.25a) What is the balance of trade at an income of $800?b) What is the balance of trade at an income of $2000?c) At what income level is there a zero balance of
12. Which of the following will increase if prices fall, and why?a) exportsb) investmentc) government spendingd) importse) consumption
11.a) Which of the following circumstances would lead to an increase in national income?i) an increase in the marginal propensity to import ii) an increase in autonomous consumption iii) a decrease in the marginal tax rate iv) a decrease in government spending v) an increase in the marginal
10. Find the value of MPE, MLR, and the multiplier if the MPS = 0.075, the MTR = 0.25, and the MPM = 0.075.Y TYD C S I G X IM XN AE 0 20 — 30 — 50 — — 10 —100 — 60 102 — — 70 — — -2 200 60 — — — — — 20 — —300 — 220 246 -26 — — — — -26
9. You are given the following table for the economy of Narkia.Assuming that the MPC, MTR, and MPM are constant and I, G, and X are all autonomous.a) Fill in the table.b) Calculate the value of the expenditures equilibrium.
8. If T = 50 + 0.25Y; G = 200; IM = 30 + 0.1Y; and X = 120, what are the budget balance (T - G) and the trade balance(X - IM) at the following income levels?a) 400b) 600c) 900d) 1200
7. What does it mean when we say that some amount of imports may be autonomous? Explain the phrase, and give examples to illustrate your answer.
6. Note the accompanying graph.a) What is the algebraic expression for aggregate expenditures?b) What is the value of expenditures equilibrium?
5. Given the following values for the MPE, calculate the values of the MLR and multipliers.a) 0.9b) 0.75c) 0.6d) 0.5
4. Given that for a private, closed economy C = 80 + 0.6Y and I = 120, what is the algebraic expression for AE, and what is the value of expenditures equilibrium?National Aggregate Income Consumption Saving Investment Expenditures 0 100 -100 200 200 280 -80 200 400 460 -60 200
3. You are given the accompanying table for a private, closed economy.a) Fill in the AE column.b) What are the equations for the consumption, investment, and aggregate expenditures functions?c) What is the value of expenditures equilibrium?
2.a) Complete the table, assuming that the MPC is constant.b) What are the equations for the consumption and saving functions?National Income Consumption Saving 0 60 200 220 400 20 600 60 800 700
1. The following graph shows the consumption function for the economy of Astrid.a) Complete the following table.b) Draw in the saving line in the graph.National Income Consumption Saving(Y) (C) (S)0 200 400 600 800 1000 1200
LO5 Derive aggregate demand from aggregate expenditures
LO4 Describe how government’s budget balance and the balance of trade both relate to national income.
LO3 Explain how the multiplier produces big changes in national income as a result of small changes in spending.
LO2 Explain the concept of expenditures equilibrium.
LO1 Describe the marginal propensity to consume and how consumption, saving, and investment relate to national income.
15. (LO 6) How does the economy adjust if there is a recessionary gap? If there is an inflationary gap?
14. (LO 4) Suppose that the economy of Bunderland is initially at full-employment equilibrium. Explain, in terms of shifts in AD or AS, how the following results could occur.a) Real GDP increases; the price level increases; the economy is experiencing an inflationary gap.b) Real GDP increases; the
13. (LO 4) Why does an increase in potential GDP (LAS) leave the economy in a recessionary gap?
12. (LO 4) Starting from full-employment equilibrium, explain what effect an increase in aggregate demand will have on price, real GDP, and equilibrium.Advanced (Problems 13–15)
11. (LO 2) What are the three reasons for the downward slope of the aggregate demand curve?
10. (LO 2) You are given the following options.1. ↑ aggregate demand 2. ↓ aggregate demand 3. ↑ aggregate supply 4. ↓ aggregate supply 5. ↑ aggregate supply and potential GDP 6. ↓ aggregate supply and potential GDP Which of options 1–6 will occur as the result of the following
9. (LO 1) Assume that the size of the labour force in the economy of Mersin remained unchanged in the year 2011 while labour productivity increased. If real GDP also remained unchanged, what change in the labour market must have occurred?
8. (LO 4) In Figure 5.30, show a new equilibrium on the graph illustrating demand-pull inflation, and then name three things that could have caused the change.a)b)c)
7. (LO 4) Use the graph in Figure 5.29 to illustrate the effect of the Great Depression on the Canadian economy, when prices, production, and employment all decreased dramatically in the 1930s. (Assume the economy was originally at full-employment equilibrium.)
6. (LO 3) What factors can cause an increase in aggregate demand?
5. (LO 1) What does the term potential GDP mean?
4. (LO 6) Explain, in terms of a graph, how an increase in aggregate demand could have no effect on the price level.
3. (LO 4) Starting from equilibrium, explain in terms of changes in either AD or in AS (not both) how each of the following results could have occurred.a) Real GDP increases, and the price level increases.b) Real GDP decreases, and the price level increases.c) Real GDP increases, and the price
2. (LO 3, 4) Starting from full-employment equilibrium, indicate whether each of the following factors will affect aggregate demand (AD) or aggregate supply (AS) and whether the effect would be an increase or a decrease.Then, indicate what will happen to the price level and the level of real GDP
1. (LO 1) What are the four sources of economic growth?

Showing 3800 - 3900 of 6280

First
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
Last

Step by Step Answers

Services

Sitemap
Fun
Definitions
Become Tutor
Used Textbooks
Study Help Categories
Recent Questions
Expert Questions
Campus Wear
Sell Your Books

Company Info

Security
Copyrights
Privacy Policy
Terms & Conditions
SolutionInn Fee
Scholarship
Online Quiz
Give Feedback, Get Rewards

Get In Touch

About Us
Contact Us
Career
Jobs
FAQ
Student Discount
Campus Ambassador

Secure Payment

Download Our App

© 2026 SolutionInn. All Rights Reserved