Thank you for your help! I would really appriciate it. If C 100 + 0.6Y and I-50,

Question

Thank you for your help! I would really appriciate it.

If C 100 + 0.6Y and I-50, then the equilibrium level of income is: 450 375 525 390 QUESTION 32 The federal government runs a budget surplus because it buys back fewer bonds than it issues it spends less than what it receives in tax revenues. it spends more than what it receives in tax revenues. the economy is in a recession. QUESTION 33 Which of the following are the factors that affect the short-run aggregate supply curve? input prices the state of technology taxes and subsidies All of these can affect the SRAS curve. QUESTION 34 dec rease in personal income taxes will lead to no change in aggregate d an increase in aggregate demand a decrease in aggregate demand emand.

Explanation / Answer

Question 31

C = 100 + 0.6Y

I = 50

At equilibrium,

Y = C + I

Y = 100 + 0.6Y + 50

Y - 0.6Y = 150

0.4Y = 150

Y = 150/0.4 = 375

The equilibrium level of income is 375.

Hence, the correct answer is the option (b) [375].

Question 32

When tax revenue collected by government exceeds the spending made by the government then in that case government budget is said to be in surplus.

So,

The federal government runs a budget surplus because it spends less than what it recieves in tax revenues.

Hence, the correct answer is the option (b) [it spends less than what it receives in tax revenues].

Question 33

Change in the following items impacts the short-run aggregate supply curve -

1. Input prices

2. Change in technology

3. Subsidies and taxes

Hence, the correct answer is option (d) [All of these can affect the SRAS curve].

Question 34

A decrease in personal income taxes will increase the disposable income of households.

Increase in disposable income will induce the households to increase their consumption spending.

Consumption spending is a component of aggregate demand.

So, increase in consumption spending will lead to increase in aggregate demand.

Hence, the correct answer is the option (b) [an increase in aggregate demand].

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