72 223
Assignments Done
Successfully Done
In April 2019

Answer to Question #12962 in Macroeconomics for Rachel

Question #12962
Suppose we add government sector with: T=200+0.25*Y, G=990 where T is taxes (net of treansfers) and G is government spending on goods and services.

a) Is the government running a surplus or a deficit? Explain your answer
b) Explain the reason why the multiplier could decrease in value.
Expert's answer
a) If taxes are bigger then government spandings that government running a
deficit because of decreasing GDP and restricting existing
Otherwise, government running a surplus.

b) multiplier could
decrease because of impact of taxes, when taxes are growing up , GDP is growing
down/ Changing of GDP is decreasing and multiplier in this case could decrease

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!


No comments. Be first!

Leave a comment

Ask Your question

Privacy policy Terms and Conditions