Suppose that total factor productivity, Z, affects the productivity of government production just as it affects private production. That is, suppose that when the government collects taxes, it acquires goods that are then turned into government-produced goods according to G=ZT, so that z units of government goods are produced for each unit of taxes collected. With the government setting G, an increase in z will imply that a smaller quantity of taxes are required to finance the given quantity of government purchases, G. Under these circumstances, use a diagram to determine the effects of an increase in z on output, consumption, employment, and the real wage, treating Gas given. Click the icon to view information about the initial model used here. Aggregate output Consumption Employment The real wage After the increase in z under these circumstances, compared to a case where initially equilibrium aggregate output, consumption, employment, and the real wage are all identical but where total factor productivity does not affect the productivity of government production, aggregate output consumption employment and the real wage Suppose that total factor productivity, z, affects the productivity of government production just as it affects private production. That is suppose that when the government collects taxes, it acquires goods that are then turned into government-produced goods according to G=ZT, so that z units of government goods are produced for each unit of taxes collected. With the government setting G, an increase in z will imply that a smaller quantity of taxes are required to finance the given quantity of government purchases, G. Under these circumstances, use a diagram to determine the effects of an increase in z on output consumption, employment, and the real wage, treating G as given. Click the icon to view information about the initial model used here. Aggregate output Consumption Employment After the increase real wage are all i may increase, decrease, or not change. must not change. must increase. ise where initially equilibrium aggregate output, consumption, employment, and the it affect the productivity of government production, aggregate output employment and the real wage must decrease. Suppose that total factor productivity, z, affects the productivity of government production just as it affects private production. That is suppose that when the government collects taxes, it acquires goods that are then turned into government-produced goods according to G=ZT, so that z units of government goods are produced for each unit of taxes collected. With the government setting G, an increase in z will imply that a smaller quantity of taxes are required to finance the given quantity of government purchases, G. Under these circumstances, use a diagram to determine the effects of an increase in z on output, consumption, employment, and the real wage, treating Gas given. Click the icon to view information about the initial model used here. Aggregate output Consumption Employment The real wage After the increase in z under these circumstances, compared to a case whe real wage are all identical but where total factor productivity does not affect consumption must increase. must not change may increase, decrease, or not change. stion, employment, and the gate output and the real wage must decrease Suppose that total factor productivity, z, affects the productivity of government production just as it affects private production. That is suppose that when the government collects taxes, it acquires goods that are then turned into government-produced goods according to G=ZT, so that z units of government goods are produced for each unit of taxes collected. With the government setting G, an increase in z will imply that a smaller quantity of taxes are required to finance the given quantity of government purchases, G. Under these circumstances, use a diagram to determine the effects of an increase in z on output, consumption, employment, and the real wage, treating Gas given. Click the icon to view information about the initial model used here. Aggregate output Consumption Employment The real wage must increase compared to a case where initially equilibrium aggregate output, consumption, employment, and the oductivity does not affect the productivity of government production, aggregate output employment and the in must not change. may increase, decrease, or not change. must decrease 3 Suppose that total factor productivity, Z, affects the productivity of government production just as it affects private production. That is, suppose that when the government collects taxes, it acquires goods that are then turned into government-produced goods according to G=ZT, so that z units of government goods are produced for each unit of taxes collected. With the government setting G, an increase in z will imply that a smaller quantity of taxes are required to finance the given quantity of government purchases, G. Under these circumstances, use a diagram to determine the effects of an increase in z on output, consumption, employment, and the real wage, treating Gas given. Click the icon to view information about the initial model used here. Consumption Employment Aggregate output The real wage After the increase in z under these circumstances, compai real wage are all identical but where total factor productivit consumption real wage must increase output, consumption, employment, and the roduction, aggregate output and the must decrease. may increase, decrease, or not change. must not change. Suppose that total factor productivity, Z, affects the productivity of government production just as it affects private production. That is suppose that when the government collects taxes, it acquires goods that are then turned into government-produced goods according to G=ZT, so that z units of government goods are produced for each unit of taxes collected. With the government setting G, an increase in z will imply that a smaller quantity of taxes are required to finance the given quantity of government purchases, G. Under these circumstances, use a diagram to determine the effects of an increase in z on output, consumption, employment, and the real wage, treating Gas given. Click the icon to view information about the initial model used here. Aggregate output Consumption Employment The real wage After the increase in z under these circumstances, compared to a case where initially equilibrium aggregate output, consumption, employment, and the real wage are all identical but where total factor productivity does not affect the productivity of government production, aggregate output consumption employment and the will be higher will be the same could be higher, lower, or the same, will be lower Suppose that total factor productivity, z, affects the productivity of government production just as it affects private production. That is, suppose that when the government collects taxes, it acquires goods that are then turned into government-produced goods according to G=ZT, so that z units of government goods are produced for each unit of taxes collected. With the government setting G, an increase in z will imply that a smaller quantity of taxes are required to finance the given quantity of government purchases, G. Under these circumstances, use a diagram to determine the effects of an increase in z on output, consumption, employment, and the real wage, treating Gas given. Click the icon to view information about the initial model used here. Aggregate output Consumption Employment The real wage After the increase in z under these circumstances, compared to a case where initially equilibrium aggregate output, consumption, employment, and the real wage are all identical but where total factor productivity does not affect the productivity of government production, aggregate output consumption employment and the real wage will be higher will be the same will be lower, could be higher, lower, or the same, Suppose that total factor productivity, Z, affects the productivity of government production just as it affects private production. That is, suppose that when the government collects taxes, it acquires goods that are then turned into government-produced goods according to G=ZT, so that z units of government goods are produced for each unit of taxes collected. With the government setting G, an increase in z will imply that a smaller quantity of taxes are required to finance the given quantity of government purchases, G. Under these circumstances, use a diagram to determine the effects of an increase in z on output, consumption, employment, and the real wage, treating Gas given. Click the icon to view information about the initial model used here. Aggregate output Consumption Employment The real wage After the increase in z under these circumstances, compared to a case where initially equilibrium aggregate output, consumption, employment, and the real wage are all identical but where total factor productivity does not affect the productivity of government production, aggregate output consumption employment and the real wage will be lower, will be the same could be higher, lower, or the same, will be higher Suppose that total factor productivity, Z, affects the productivity of government production just as it affects private production. That is, suppose that when the government collects taxes, it acquires goods that are then turned into government-produced goods according to G=ZT, so that z units of government goods are produced for each unit of taxes collected. With the government setting G, an increase in z will imply that a smaller quantity of taxes are required to finance the given quantity of government purchases, G. Under these circumstances, use a diagram to determine the effects of an increase in z on output, consumption, employment, and the real wage, treating Gas given. Click the icon to view information about the initial model used here. Aggregate output Consumption Employment The real wage After the increase in z under these circumstances, compared to a case where initially equilibrium aggregate output, consumption, employment, and the real wage are all identical but where total factor productivity does not affect the productivity of government production, aggregate output consumption employment and the real wage will be the same will be higher could be higher, lower, or the same. will be lower