Suppose we have the following scenario: Multiplier: 1.2 Tax Rate: 16% Increase in spending: $175 Billion Total Deficit in the previous year: $1 Trillion Based on the information provided what is the deficit that arises from the increase in spending from the government

Deficit = $141.4 billion

Explanation:

Multiplier (K) = ΔY {GDP(income)} / ΔI {Govt spending}

ΔY = K * ΔI

ΔY = 1.2 * $175 billion

ΔY = $210 billion (income)

Tax applicable on income that generate revenue:

Revenue = 210 billion * 16%

Revenue = 210 billion * 0.16

Revenue = $33.6 billion

Deficit = Government spending - Revenue

Deficit = $175 billion - $33.6 billion

Deficit = $141.4 billion

being born in poverty would limit the people's chances, opportunities and benefits.

this happen because of several things, such as:

- poor people tend to gain less access to good education and nutrition. this mean that their chance to obtain high paying jobs would also be limited.

- poor people tend to socialize with other poor people while the rich tend to socialize with other rich people. this means that simply throguh their social circle, rich people would have more business opportunities compared to the poor people.

- rich people tend to have more capital in their disposal. this would benefit them in business since it is far easier for them to fund their business operation compared to poor people.

answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.