Use the Table Below to Answer the Following Questions

question 19

Essay

Use the table below to answer the following questions.Assume that investment, net exports, government expenditures, and taxes do not change with changes in real GDP. (a) What is the size of the multiplier in this economy?
(b) If taxes are zero, government expenditures are $10, investment is $6, and net exports are zero, what is the equilibrium GDP?
(c) If taxes are $5, government expenditures are $10, investment is $6, and net exports are zero, what is the equilibrium GDP?
(d) Assume investment is $50, taxes are $50, net exports and government expenditures are each zero.The full-employment level of real GDP is $340.How much of a reduction in taxes is needed to eliminate the recessionary gap?
(e) Assume that investment, net exports, and taxes are zero.Government expenditures are $20 and the full-employment level of real GDP is $330.By how much must government spending be reduced to eliminate the inflationary gap?

---

Definitions:

Movement Of Capital

Refers to the flow of money for the purpose of investment, trade, or business production internationally.

Crew Activity

involves the tasks or work performed by a group of workers acting together, often referenced in contexts like film production, construction, or aviation.

Job Expansion

Increasing the scope or range of tasks and responsibilities associated with a specific job to enhance employee satisfaction and productivity.

Capital Cost

The one-time expenses incurred in the acquisition or construction of a significant fixed asset like buildings or equipment.