(c) The following table is the information of the real GDP and all the expenditures(the numbers are in billions) for Country XYZ.PlannedGovernmentReal GDP (S) Consumption ($)Net Exports ($)Investment ($)350Purchases ($)45040003500-10050004300350450-10060005100350450-10070005900350450-100(i)What is the equilibrium level of real GDP?(ii)If potential GDP is $7000 billion, is the economy at full employment?If not, what is the condition of the economy?If the economy is not at full employment, by how much shouldgovernment spending increase so that the economy can move to thefull employment level of GDP?

Here we calculate the following terms as follow-

(c) The following table is the information of the real GDP and all the expenditures (the numbers are in billions) for Country XYZ. Planned Investment ($) | Purchases ($) 350 Government Real GDP (S) Consumption ($) Net Exports ($) 4000 3500 450 -100 5000 4300 350 450 -100 6000 5100 350 450 -100 7000 5900 350 450 -100 (1) What is the equilibrium level of real GDP? (ii) If potential GDP is $7000 billion, is the economy at full employment? If not, what is the condition of the economy? (ii) If the economy is not at full employment, by how much should government spending increase so that the economy can move to the full employment level of GDP?

(c) The following table is the information of the real GDP and all the expenditures (the numbers are in billions) for Country XYZ. Planned Investment ($) | Purchases ($) 350 Government Real GDP (S) Consumption ($) Net Exports ($) 4000 3500 450 -100 5000 4300 350 450 -100 6000 5100 350 450 -100 7000 5900 350 450 -100 (1) What is the equilibrium level of real GDP? (ii) If potential GDP is $7000 billion, is the economy at full employment? If not, what is the condition of the economy? (ii) If the economy is not at full employment, by how much should government spending increase so that the economy can move to the full employment level of GDP?

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter5: Gross Domestic Product

Section: Chapter Questions

Problem 4SQ

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