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(b) Expl… Show more Assume Yn =11,600, t=0.2 and G=2610 (a

Paper help Economics (b) Expl… Show more Assume Yn =11,600, t=0.2 and G=2610 (a

Economics

(b) Expl… Show more Assume Yn =11,600, t=0.2 and G=2610 (a

(b) Expl… Show more Assume Yn =11,600, t=0.2 and G=2610 (a) compute the amount of taxes at natural real GDP (b) Explain why there is a natural unemployment deficit. Compute the amount of the natural employment deficit in terms of both billions of dollars and as a percent of natural real GDP. (c) suppose the goal of fiscal policy makers is to reduce the size of the natural employment deficit to 1 percent of natural real GDP. Compute what the size of teh natural employment deficit must be in terms of billions of dollars in order for fiscal policy makers to (d) Given no change in the tax rate, compute by how much fiscal policy makers must cut government spending in order to accomplish their goal. (e) Given no change in government spending, compute by how much fiscal policy makers must increase the tax rate in order to accomplish their goal. (f) Given the objective of fiscal policy makers, explain what action monetary policymakers must take for the actions of fiscal policymakers to have no effect on real income. (g) Suppose that private saving increase as the interest rates increase. Given the fiscal monetary policy mix described in parts c-f, explain whether the national saving increases by an amount that is larger than, equal to, or less than the decrease in the natural employment defecit. • Show less

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