Macroeconomics Answers

Which of the following would not be an expansionary fiscal policy?

Increased welfare payments to the poor
Decreases in federal taxes on corporations
A balanced budget
Increased government expenditures on goods and services

If the actual budget deficit is $100 billion, the economy is operating $250 billion below its potential, and the marginal tax rate is 20 percent, then:

a. There is a passive surplus of $150 billion, and a structural deficit of $50 billion
b. There is a passive surplus of $50 billion, and a structural deficit of $150 billion
c. There is a passive deficit of $50 billion, and a structural deficit of $50 billion
d. There is a passive deficit of $50 billion, and a structural deficit of $150 billion

Government debt is defined as

a shortfall of incoming revenue relative to outgoing payment
a shortfall of outgoing payments relative to incoming revenue
accumulated deficits minus accumulated surpluses
accumulated surpluses minus accumulated deficits

consumption function C=2+0.7(Y-T). If taxes increase by $10, what would happen to the aggregate expenditure line?

The marginal propensity to consume is

Deficit in current account of balance of payment?

Draw a graph showing the effect of a tobacco tax on the market for cigarettes.lebel on your diagram the price increse,the old and new equilibrium points, the areas of consumer surplus,producer surplus,consumer tax incidence,producer taxinsidence,consumer deadweight loss and producer deadweight loss.then explain briefly the processes involved in the graph and describe how the imposition of this tax affect allocative efficinecy.

Suppose there is $400 billion of cash (currency and coins) in existence. Banks hold 10% of it in their vaults. In addition, banks hold an identical amount in the (non-cash) form of reserve deposits with the Fed.
a) How large are the total reserves of banks? [hint: remember that reserves can take only two forms: vault cash and/or reserve deposits.]
b) Given your answer to (a), and assuming that the total reserves of banks exactly satisfy the Fed’s 10% reserve requirement, how large are the total deposit liabilities of banks (the deposits against which reserves must be held)? [hint: remember, total reserves here are 10% of total deposits. Even bigger hint: the answer is not $8 billion, nor is it $4 billion.]
c) Given your answer to (b), how large is the (M1) money supply? [hint: recall the definition of M1 money, and the fact that it has two major components; you can ignore travelers checks in this problem.]

Given that C= 500+ 0.8y, if the level of disposable income is 1000, The level of saving is?

if the inventory value is negative than what is the interpretation??