Real Consumption ($) Real Disposable Income=Real GDP($) 120 100 200 200 280 300
ID: 1237720 • Letter: R
Question
Real Consumption ($) Real Disposable Income=Real GDP($)120 100
200 200
280 300
360 400
440 500
520 600
Give the amount of the change in the equilibrium level of Real GDP due to a $6 increase in lump-sum taxes.
Give the amount of the change in the equilibrium level of Real GDP due to a $3 decrease in lump-sum taxes.
Suppose spending on goods and services is increased by $6 and lump-sum taxes are increased by $6. Give the amount of the change in the equilibrium level of Real GDP.
Suppose spending on goods and services is decreased by $3 and lump-sum taxes are decreased by $3. Give the amount of the change in the equilibrium level of Real GDP.
Explanation / Answer
for every $80 increase in spending the equilibrium gdp has increased by $100 so for increase of $6 spending, the gdp would increase by 6*100/80 = 7.5 similarily for an icnrease of $6 GDPspending would increase by 6*80/100 = 4.8 similarly solve for the last two sections
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