Homework Help: Macroeconomics

Posted by Isis on Sunday, November 4, 2012 at 3:18pm.

Wondering if I am doing this correctly??

If net taxes are increased by 3 billion dollars by how much would we expect real GDP to change?

My answer is: d) If the government increases taxes by 3 billion dollars we would use the tax multiplier to determine what the change in GDP would be. NT=-MPC/1-MPC=
3 *.78/1-.78= .78/, 22=4*3 = 12 billion increase in GDP.

No one has answered this question yet.

Answer this Question

Related Questions

macroeconomics - Assume that the government purchases decrease by 10 billion, ...
Macroeconomics - A bank has issued 4 billion in transactions deposits and 2 ...
Macroeconomics - Suppose the money supply is currently 500 billion and the Fed ...
College Macroeconomics - Can someone who knows Macroeconomics check this? Write ...
Math - Suppose C(x) measures an economy's personal consumption expenditure ...
math - Suppose C(x) measures an economy's personal consumption expenditure ...
econ - Real GDP equaled $9,191 billion in 2000 and $9,215 billion in 2001. Both ...
economics - With proportional income tax, a. The tax multiplier equals (MPC)(1-...
macroeconomics 205 - Last month, you sold an old car to your neighbor for 5000 ...
Economics - The value of the marginal propensity to save is 0.2. If real GDP ...

For Further Reading

First Name:
School Subject:
Answer: