If short run equilibrium output equals 10000 the income expenditure multiplier

If short run equilibrium output equals 10000 the

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125.If short-run equilibrium output equals 10,000, the income-expenditure multiplier equals 10, the MPC equals .9, and potential output (Y*) equals 9,000, then taxes must be increased by ________ (rounded to the nearest whole number) to eliminate any output gap. A.111B. 100C. 1000D. 11 AACSB: Analytical Skills Blooms: Application Frank - Chapter 21 #125 Learning Objective: 21-04 Show how a change in planned aggregate expenditure can cause a change in short-run equilibrium output and how this is

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related to the income expenditure multiplier. Section: Stabilizing Planned Spending: The Role of Fiscal Policy 126.If short-run equilibrium output equals 10,000, the income-expenditure multiplier equals 5, the MPC equals .8, and potential output (Y*) equals 9,000, then taxes must be increased by ________ to eliminate any output gap. AACSB: Analytical Skills Blooms: Application Frank - Chapter 21 #126 Learning Objective: 21-04 Show how a change in planned aggregate expenditure can cause a change in short-run equilibrium output and how this is related to the income expenditure multiplier.
Section: Stabilizing Planned Spending: The Role of Fiscal Policy 127.In the basic Keynesian model a tax cut: AACSB: Analytical Skills Blooms: Knowledge Frank - Chapter 21 #127 Learning Objective: 21-04 Show how a change in planned aggregate expenditure can cause a change in short-run equilibrium output and how this is related to the income expenditure multiplier. Section: Stabilizing Planned Spending: The Role of Fiscal Policy

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128.In the basic Keynesian model a tax increase: AACSB: Analytical Skills Blooms: Knowledge Frank - Chapter 21 #128 Learning Objective: 21-04 Show how a change in planned aggregate expenditure can cause a change in short-run equilibrium output and how this is related to the income expenditure multiplier. Section: Stabilizing Planned Spending: The Role of Fiscal Policy
129.In the basic Keynesian model an increase in transfer payments: A. reduces short-run equilibrium output. B.increases short-run equilibrium output. C. reduces potential output. D. increases potential output. AACSB: Analytical Skills Blooms: Knowledge Frank - Chapter 21 #129 Learning Objective: 21-04 Show how a change in planned aggregate expenditure can cause a change in short-run equilibrium output and how this is related to the income expenditure multiplier. Section: Stabilizing Planned Spending: The Role of Fiscal Policy

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