23. Describe the interaction between the multiplier and accelerator following an increase in government spending.（30 marks）

Expert Solution

Rahul Sunny answered 2 years ago

describe the interaction between the multiplier and accelerator following an increase in government spending.

1.If the government spending multiplier is 1 then a $1 increase in deficit-financed government spending will...

1.If the government spending multiplier is 1 then a $1 increase in deficit-financed government spending will lead to a zero percentage increase in output. a-true b- false 2. If the marginal propensity to consume is 13 then the government spending multiplier is 3. a-true b- false 3.Which combination of policies are likely to provide Keynesian stimulus to an economy in a depression? a-Tax cuts on investment and increases in defense spending. b-An increase in the income tax rate and an...

Describe how the multiplier works when the government decreases spending? Explain how the multiplier depends on...

Describe how the multiplier works when the government decreases spending? Explain how the multiplier depends on the MPC and the income tax rate. Provide intuition for your answer. What happens if MPC = 0? What happens if MPC = 1? Draw the Keynesian consumption function and relate the size of the multiplier to the slope of the Keynesian consumption function.

3. In the multiplier-accelerator interaction model, how does cyclical time path form and what will lead...

3. In the multiplier-accelerator interaction model, how does cyclical time path form and what will lead to its divergence from long-run equilibrium output

1) How is the idea of the government spending multiplier, or multiplier effects in general, illustrated...

1) How is the idea of the government spending multiplier, or multiplier effects in general, illustrated in this video? 2) What could happen to Jacksonville MSA's local economy and the Southeast region if such a major project, which was initiated in June 2014, is completed and all needed state funding is secured?

How do we create money? What is government spending multiplier?

If the economy is at full employment, increases in government spending: A) have a multiplier effect...

If the economy is at full employment, increases in government spending: A) have a multiplier effect on equilib rium output. B) have no effect on the aggregate price level. C) are primarily absorbed by price increases. D) reduce aggregate output

An increase in government spending initially and primarily shifts

An increase in government spending initially and primarily shifts aggregate demand right aggregate demand left aggregate supply right neither aggregate demand nor aggregate supply

An increase in government spending initially and primarily shifts

An increase in government spending initially and primarily shifts a. aggregate demand to the right. b. aggregate demand to the left. c. aggregate supply to the right. d. neither aggregate demand nor aggregate supply in either direction.

An increase in government spending shifts aggregate demand

An increase in government spending shifts aggregate demand a. to the right. The larger the multiplier is, the less it shifts b. to the left. The larger the multiplier is, the farther it shifts. c. to the left. The larger the multiplier is, the less it shifts. d. to the right. The larger the multiplier is, the farther it shifts.

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23. Describe the interaction between the multiplier and accelerator following an increase in government spending.（30 marks）

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describe the interaction between the multiplier and accelerator following an increase in government spending.

1.If the government spending multiplier is 1 then a $1 increase in deficit-financed government spending will...

Describe how the multiplier works when the government decreases spending? Explain how the multiplier depends on...

3. In the multiplier-accelerator interaction model, how does cyclical time path form and what will lead...

1) How is the idea of the government spending multiplier, or multiplier effects in general, illustrated...

How do we create money? What is government spending multiplier?

If the economy is at full employment, increases in government spending: A) have a multiplier effect...

An increase in government spending initially and primarily shifts

An increase in government spending initially and primarily shifts

An increase in government spending shifts aggregate demand