QUESTIONS:
PART A: (Computing the multipliers)
Calculate the following values for the Kazkhstan economy:
1. The net tax rate ________________
2. The MPC out of YD ________________
3. The MPC out of GDP ________________
4. The slope of the Aggregate Planned
Expenditure (APE) curve ________________
5. The Autonomous spending multiplier ________________
6. The Autonomous transfer payment
multiplier ________________
7. The Autonomous tax multiplier ________________
8. The Balanced budget multiplier ________________
PART B: (Projecting GDP and its components)
Make the following projections for the Kazkhstan economy in 1998:
1. Total autonomous spending ________________
2. Equilibrium GDP ________________
3. Imports ________________
4. International Trade Deficit ________________
5. Transfer payments ________________
6. Taxes ________________
7. Net Taxes ________________
8. The Government Deficit ________________
9. Disposable Income ________________
10. Consumption ________________
11. Saving ________________
C. Analysis
1. How large would Net Taxes (Taxes minus Transfers) be if GDP were zero?
_________________
2. How large would the equilibrium GDP have to be in 1998 to have a zero
trade deficit? ____________________________________
3. How large would the equilibrium GDP have to be in 1998 in order to have
a zero government deficit? ________________________
4. If the potential real GDP is less than the projected GDP for 1995, what
is likely to happen to the price level?
___________________________________
5. If prices rise in 1998, what will happen to projected real GDP in 1998?
________________________________
D. Fiscal Policy
A government analysis of the Kazakhstan economy produced an estimate that
the full employment GDP is 210.
1. How large a change in projected GDP would be required to
bring the equilibrium real GDP down to 210? __________________________
2. How large a change in government spending would be required to bring
the equilibrium real GDP down to 210? __________________________
3. How large a change in autonomous taxes would be required to bring the
equilibrium real GDP down to 210? ____________________________
4. How large a balanced change in the government budget would be required
to bring the equilibrium real GDP down to 210?
____________________________