Economics Questions (Macroeconomics) [Proportional Tax, Deflation Gap]
Author: shiroeExecutions: 18
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Enter a non-negative value for basic consumption.
Enter a value greater than 0 and less than 1 for the marginal propensity to consume.
Enter values between 0 and 1 for the proportional tax rates t1 and t2.
For example, enter 0.05 for a 5 percent tax rate and 0.1 for a 10 percent tax rate.
Enter non-negative values for private investment and full-employment GDP.
Enter values of 0 or greater for the deflation gap.
(This is because entering a negative value will result in an inflation gap.)
Enter a value greater than 0 and less than 1 for the marginal propensity to consume.
Enter values between 0 and 1 for the proportional tax rates t1 and t2.
For example, enter 0.05 for a 5 percent tax rate and 0.1 for a 10 percent tax rate.
Enter non-negative values for private investment and full-employment GDP.
Enter values of 0 or greater for the deflation gap.
(This is because entering a negative value will result in an inflation gap.)
| Fiscal Expenditures G | Question (1) Answer |
| Fiscal Balance T-G | Question (1) Answer |
| Increase in government spending | Question (2) Answer |
| Change in Fiscal Expenditures | Question (2) Answer |
R6 (2024). August 4 (Sun)_Ver. 001
Digit setting: 50 digits. Fixed digits.
Real number calculation mode.
Digit setting: 50 digits. Fixed digits.
Real number calculation mode.
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These questions are from the field of macroeconomics.
The questions assume a proportional tax, no flat tax, and no foreign sector. I will address two questions.
Question (1)
When the proportional tax rate is t1, calculate the fiscal expenditure required to achieve full-employment GDP.
Assume that fiscal expenditure is zero before this expenditure.
Question (2)
When the proportional tax rate is t2, calculate the increase in government expenditure required to close the deflationary gap.
Also, calculate the change in government spending resulting from this increase.
Here, we define:
Change in government spending = Fiscal balance before closing the deflation gap – Fiscal balance after closing the deflation gap
. Expressed as a quantitative equation, this becomes:
ΔGovernment spending = Deflation gap × t – ΔG
.