Advanced Placement (AP), 04.03.2021 21:50, wolfsilvereye10

AP Macroeconomics Assume that political instability around the world causes American business firms to decrease business investment signaling the start of a recession in the economy.
a. How would a recession impact the federal budget?
b. If real GDP drops to $800 billion while potential GDP is $1,200 billion and the marginal propensity to consume is .75, then
-Calculate the minimum change in government spending that could close the recessionary gap. Show your work.
-Calculate the minimum change in personal income taxes that could close the recessionary gap. Show your work.
c. How will the change in real interest rates caused by either action in part B impact economic growth in the United States?

Answers: 2

Show answers

Other questions on the subject: Advanced Placement (AP)

Advanced Placement (AP), 22.06.2019 01:40, liyaoron

If the fed begins to buy treasury bills to counter a recession, we would expect to see a. an increase in the demand for money. b. a decrease in the demand for money c. an increase in the quantity of money demanded. d. a decrease in the quantity demanded of money, e. no change in the demand for money.

Answers: 2

continue

Advanced Placement (AP), 23.06.2019 12:00, b2cutie456

Carrie received a w-2 form, 1099-misc, and a 1099-int. what is most likely true about carrie?

Answers: 1

continue

Advanced Placement (AP), 24.06.2019 22:00, driskell3

Question 10 (yes/no worth 5 points) apply strategies for self-improvement based on individual strengths and needs. i will learn spanish. a. yes b. no

Answers: 1

continue

Advanced Placement (AP), 25.06.2019 11:40, valerrry

What is a system where wealth and property are privately held and profit is the goal rather than providing for collective needs? a. capitalism b. socialism c. communism d. feudalism

Answers: 1

continue

Do you know the correct answer?

AP Macroeconomics Assume that political instability around the world causes American business firms...