Answer to Question #92386 in Macroeconomics for Ashleigh

Question

Question 2: What is the distinction between the government’s budget deficit and the government’s debt?

Question 3: Suppose that there is a decrease in government spending of $70 billion, and that the government spending multiplier is 2. How does the real GDP change? Calculate.

Question 4: Suppose that there is an increase in taxes of $42 billion, and that the tax multiplier is -1.5. How does the real GDP change? Calculate.

Question 5: Suppose that there is an increase in taxes of $16 billion, and that Real GDP decreases by $20 billion as a result. What is the value of the tax multiplier?

Answer 1

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