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For each of the following values of the marginal propensity to consume (MPC), find the value of the government purchases multiplier and the tax multiplier. a. MPC = 0.80 b. MPC = 0.75 c. MPC = 0.60

Considerthe following information on an economy (all values are in trillions of 2005 dollars): a. Calculate equilibrium real GDP. b. Now suppose that all the information given in part (a) remains the same except that taxes equal $2.0 trillion and transfers equal $1.5 trillion. Calculate equilibrium real GDP. c. Now suppose that potential GDP equals

Suppose that the marginal propensity to consume is 0.80. a. If the government increases spending by $10 billion, what is the change in equilibrium real GDP? b. If the government increases taxes by $10 billion, what is the change in equilibrium real GDP? c. If the government increases taxes by $10 billion at the same

Using data from the St. Louis Federal Reserve (FRED) (http://research.stlouisfed.org/fred2/), analyze the long-term real interest rate. a. For 2003 to the present, download monthly data for the 10-year constant maturity U.S. Treasury security (GS10) as a measure of the nominal interest rate and the 10-year U.S. Treasury inflation protected security (FII10) as a measure of

Please type up your answers. Make sure to clearly identify which question and part you are answering. Please do all the parts as specified. To strengthen your answers use specific examples and quotes from the readings to support your points and identify your source using a parenthetical citation (author last name, pg# ). Do not

Causal Arguments in Real World, explain why people willingly assume that correlation implies causation. Causal Arguments in Real World:Correlation implies causation Topic 2. Causal Arguments in the Real World “Correlation does not imply causation” is a phrase that is often thrown around. Just because two events are associated does not mean that one cause another.

Draw a graph showing the IS–LM model and identify the initial equilibrium. a. For each of the following changes, show the effect on the output gap and the real interest rate. i. The government increases taxes. ii. The Fed decreases the money supply. iii. Consumers experience an increase in wealth due to increases in stock prices. b.

This appendix demonstrates why the IS–LM model accurately represents movements in the real interest rate and the output gap during the Great Depression. a. Review the discussion of the 2007–2009 financial crisis in the chapter. Use the IS–LM model to show the approximate movements of the real interest rate and the output gap during that period. b.

According to an article in the Economist magazine the IS-LM model’s “main virtue is that it brings together both the real and financial parts of the economy.” Briefly explain how the IS-LM model brings together the real and financial parts of the economy. Why would doing so be a virtue in a macroeconomic model?

Review this week’s Learning Resources and consider visual displays of data.For additional support, review the Skill Builder: Unit of Analysis and the Skill Builder: Levels of Measurement, which you can find by navigating back to your Blackboard Course Home Page. From there, locate the Skill Builder link in the left navigation pane.Using the SPSS software,