1)Data for the simple economic of Newt show that in 2018, saving exceeded investment and the government is running balanced budget

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1)Data for the simple economic of Newt show that in 2018, saving exceeded investment and the government is running balanced budget. What is likely to happen? What would happen if the government were running a deficit and saving were equal to investment?

 

a. MPS=0.1. What is the government spending multiplier?

b. MPC=0.6. What is the government spending multiplier?

c. MPS= 0.25. What is the government spending multiplier?

d. MPC= 0.5. What is the tax multiplier?

e. MPS = 0.2. What is the tax multiplier?

f. If the government spending multiplier is 8, what is the tax multiplier?

g. If the tax multiplier is -5, what is the government spending multiplier?

h. If government purchases and taxes are increased by $500 billion simultaneously, what will the effect be on equilibrium output (income)?

 

3)what is the balance -budget multiplier? explain why the balance - budget multiplier is equal to one.