We are interested in the fiscal policy choices of the country of Goryeo. Following the discovery...

 

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We are interested in the fiscal policy choices of the country of Goryeo. Following the discovery of new oil and gold resources along the shores of the country, firms and consumers' confidence and expectations are up. GDP increases beyond its potential and the economy starts to overheat. 1. In the past, every time that aggregate income decreased by $200 million in Goryeo, aggregate consumption there decreased by $75 million, What is the marginal propensity to consume for the economy of Goryeo? What is the government spending multiplier (you can ignore taxes and the external sector)? 2. The government of Goryeo estimates that the GDP is $250 billion above its potential. By how much do they need to reduce government spending to return GDP to its potential level? 3. The Government of Goryeo had started the year with a debt of $500 billion. After it implements its contractionary policy it generated a surplus of $23 billion. What is the new stock of debt in billions? If the total GDP is $950 billion what is the debt-to-GDP ratio? We are interested in the fiscal policy choices of the country of Goryeo. Following the discovery of new oil and gold resources along the shores of the country, firms and consumers' confidence and expectations are up. GDP increases beyond its potential and the economy starts to overheat. 1. In the past, every time that aggregate income decreased by $200 million in Goryeo, aggregate consumption there decreased by $75 million, What is the marginal propensity to consume for the economy of Goryeo? What is the government spending multiplier (you can ignore taxes and the external sector)? 2. The government of Goryeo estimates that the GDP is $250 billion above its potential. By how much do they need to reduce government spending to return GDP to its potential level? 3. The Government of Goryeo had started the year with a debt of $500 billion. After it implements its contractionary policy it generated a surplus of $23 billion. What is the new stock of debt in billions? If the total GDP is $950 billion what is the debt-to-GDP ratio?

Answer rating: 100% (QA)

1 MPC change in consumption change in income MPC752000375 Government s... View the full answer