Suppose the MPC is 0.6. Beginning from equilibrium, investment demand rises by 30. (a) How much does equilibrium output increase? (b) How much of that increase is extra consumption demand?
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Suppose the MPC is 0.6. Beginning from equilibrium, investment demand rises by 30. (a) How much does equilibrium output increase? (b) How much of that increase is extra consumption demand?
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- The marginal propensity to consume for this economy is …………. if income rises from $9000 to $10000 and consumption is rises from $750 to $1500 0.650. 0.750. 0.650 or 0.664, depending on whether income is $10,000 or $11,000. 0.800.You are an economic advisor to the government. Discuss your opinion . a) How COVID-19 pandemic will affect the consumption behavior as well as the investment done by the firms and household for the next two years? b) What are the actions or policies that the government can implement to face this situation? please answers with analysis and --graph (if possible)Consider an economy that is characterized by the following equations: C= 400 + 0.5 Yd I = 700 - 4000i + 0.1y G= 200 T= 200 (M/P)d - = 0.75Y - 7500€ (MP)== 600 What is the equilibrium consumption (C)?
- If the supply of petroleum were reduced by petroleum firms due to rising inventories, we can expect what?The economy of Godzillaland is represented by the following:C=50+0.25Y d , T=1000, G=1000, I=100 (a) Calculate the equilibrium level of output. Graph your solution. (b) If the government spending increases by 50 what is the new equilibrium level of output? Use the government spending multiplier. (c) If the government increases taxes by 50 what is the new equilibrium level of output? Use the tax multiplier. (d) If the government increases taxes and spending by 50 what is the new equilibrium level of output? (e) Calculate the equilibrium level of output in case where taxes depend on income according to the following: T=-25+0.125Y.Consider an economy that is characterized by the following equations: C= 400 + 0.5 Yd I = 700 - 4000i + 0.1Y G= 200 T= 200 (MP)d = 0.75Y - 7500; (M/P)S = 600 What is the equilibrium investment (I)?
- Q.1.6 Given the import function, Z = 300 + 2/3Y, which of the following statements iscorrect?(2)(a) The marginal propensity to save is 1/3;(b) The induced component is 300;(c) 2/3 is the proportion of any income spent on imports;(d) None of the statements is correct.Assume that an economy is characterized by the following equations: C = 100 + 0.5(Y – T) T = 100 G = 200 I = 50 – 2r (M/P) = (M/P) = Y – 6r (a) Solve for the equilibrium values of Y and r, assuming P = 10 and M = 4,000. (6 pointa) (b) Assume the federal government reduces spending to balance the budget. Calculate the effective IS-LM multiplier and explain why the equilibrium reduction in output was less than the value implied by the Keynesian-cross multiplier. (6 pointa)If government purchases are increased by S100, taxes are reduced by $100, and the MPC is 0.8, equilibrium output will change by Select one: Oa-5400 ob. an amount that cannot be determined from this information. OC $1,800 od.$900
- Please also find the MPS to the question with the MPC of 0.50 And find the MPC to the question with the MPS of 0.4The MPC is 0.41 If change in consumption is $650 find the change in incomeWrite down the Planner’s problem, as well as the Lagrangian. (Hint: There should be two constraints because aggregate consumption of each good cannot exceed the economy’s endowment.) Label the multipliers ϕ1 and ϕ2. What are the first order conditions of the Planner’s problem? (Hint: There should be 6.). Find the solution to the Planner’s problem and label the quantities (xpA; ypA) and (xpB; ypB). If we compare the first order conditions of the Planner’s problem to the first order conditions of a corresponding competitive equilibrium (CE), we can obtain a relationship between ϕx, ϕy, λ, px, and py so that the CE and the Planner’s problem give us the same solution. This is called decentralizing the Planner’s problem.Decentralize the Planner’s problem. (find the equilibrium prices and the value of λ so that the two problems have the same solution.) Can you relate this to the two welfare theorems?