5. The slowing of the U.S. economy in early 2008 and the financial crisis in the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
5. The slowing of the U.S. economy in early 2008 and the financial crisis in the fall lead to the passage of two bills in Congress which equaled a $700 billion stimulus to the economy. The 2008 Real GDP equaled $11.7 trillion. a. Assuming the MPC =2/3, calculate the total change in Real GDP expected from the $700 billion stimulus over time. b. Illustrate this change with an Income-Expenditure graph. Draw the original 2008 planned Aggregate Expenditure function with the original Real GDP, then add the post-stimulus planned AE with the new Real GDP. Identif the AEs as 1 and 2 and the numbered Real GDPs at their equilibrium levels. 5. The slowing of the U.S. economy in early 2008 and the financial crisis in the fall lead to the passage of two bills in Congress which equaled a $700 billion stimulus to the economy. The 2008 Real GDP equaled $11.7 trillion. a. Assuming the MPC =2/3, calculate the total change in Real GDP expected from the $700 billion stimulus over time. b. Illustrate this change with an Income-Expenditure graph. Draw the original 2008 planned Aggregate Expenditure function with the original Real GDP, then add the post-stimulus planned AE with the new Real GDP. Identif the AEs as 1 and 2 and the numbered Real GDPs at their equilibrium levels.
Expert Answer:
Answer rating: 100% (QA)
5a Using the formula for the multiplier effect Change in GDP MPC x Change in Autonomous Spen... View the full answer
Related Book For
Posted Date:
Students also viewed these general management questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
-
Ghana Water Company Limited (GWCL) Profile Ghana Water Company Limited (GWCL) is a utility company, fully owned by the State. The company is responsible for potable water supply to all urban...
-
Economists estimate price elasticities more precisely by using average price and quantity to compute percentage changes. Thus, Using this formula, compute E for a popcorn price increase from 15 cents...
-
In Problems 127136, expressions that occur in calculus are given. Factor each expression completely. (4x - 3) + x2(4x - 3). 4 2
-
At a raffle, 1500 tickets are sold at \($2\) each for four prizes of \($500,\) \($250,\) \($150,\) and \($75.\) You buy one ticket. Find the expected value and interpret its meaning.
-
Discuss why control procedures over access to the data resource become more crucial under the database approach than in the flat-file environment. What role does the DBMS play in helping to control...
-
The Refining Department of SweetBeet, Inc. had 72,000 tons of sugar to account for in July. Of the 72,000 tons, 40,000 tons were completed and transferred to the Boiling Department, and the remaining...
-
Determine the coordinate direction angles of the force. 2 45 -30 F = 75 lb
-
Consider a parallel plate capacitor having plates of area 1.55 cm2 that are separated by 0.018 mm of neoprene rubber. You may assume the rubber has a dielectric constant ? = 6.7. Capitancein ?F =...
-
1. The following table contains missing data. Marginal Opportunity product of labor wheat cloth Home Foreign 1 a. Fill in the table. 4 1 Home Foreign cost wheat cloth 0.5 No-Trade equilibrium Labor...
-
Detailed Sales What-if Analysis. Make sure it is centered across columns A G and has a heading format. b. Enter formulas in cells B6, B7, and B8 to calculate the total sales, total cost, and net...
-
3. Consider the following undirected graph G, consisting of 9 nodes laid out in a 3-by-3 grid: 0 4 7 2 Algorithm 1 Problem 3 1: function MODIFIEDBFS(G = (V, E), s) 2: 3: 4: 5: 6: 7: 8: 9: 5 8 (3...
-
Consider a tank containing a liquid, and the rate of change of the liquid's height (h) with respect to time (t) is proportional to the difference between the current height and a reference height....
-
The business activities of Beaver Company during its first month of operations are as follows: 1. Becky and Bucky Beaver start a company that they incorporate as Beaver Company on September 1, 2020,...
-
In order to determine whether or not a driver's education course improves the scores on a driving exam, a sample of 6 students were given the exam before and after taking the course. The results are...
-
1) Predict the organicproduct formed when BzCl reacts with cyclohexanol. BzCl = benzoylchloride. 2) Provide the majororganic product of the reaction below. 3) Draw the structureof the product formed...
-
Suppose you decided to follow in Vernon Smiths footsteps and conducted your own experiment with your friends. You give out 10 cards, 5 cards to buyers with the figures for willingness to pay of $1,...
-
Figure 27.5 and its discussion in the text identify some of the ultimate causes of the Wealth of Nations as Institutions of Economic Growth. One of these is honest government. Go to Gapminder at...
-
The chapter pointed out that whenever money is used to purchase capital, interest costs are incurred. Sometimes those costs are explicitlike when Alex borrowed the money from the bankand sometimes...
-
The Hagen-Poiseuille equation (Equation 6.11) describes the laminar flow of a Newtonian fluid in a tube. Since a Newtonian fluid is defined by the relation $\tau=\mu \dot{\gamma}$, rearrange the...
-
Derive the relation between the friction factor and Reynolds number in turbulent flow for smooth pipe (Equation 6.34), starting with the von Karman equation for the velocity distribution in the...
-
Evaluate the kinetic energy correction factor $\alpha$ in the Bernoulli equation for turbulent flow assuming the $1 / 7$ power law velocity profile (Equation 6.36) is valid. Repeat this for laminar...
Study smarter with the SolutionInn App