You are given the following information about a closed economy with no government: Consumption = 115 + 0.6Y Investment = 550 Use the above information to answer the questions that follow: Calculate the value of autonomous spending. Calculate the value of the multiplier. Calculate the equilibrium level of income.
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You are given the following information about a closed economy with no government:
Consumption = 115 + 0.6Y
Investment = 550
Use the above information to answer the questions that follow:
Calculate the value of autonomous spending.
Calculate the value of the multiplier.
Calculate the equilibrium level of income.
Step by step
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- You are given the following information about a closed economy with no government:Consumption = 115 + 0.6YInvestment = 550Use the above information to answer the question: Calculate the equilibrium level of income.You are given the following information about a closed economy with no government:Consumption = 445 + 0.75Y Investment = 250 Calculate the equilibrium level of income.In 2009, the US Federal government cut taxes by approximately $300 billion, increased government spending by approximately $300 billion, and increased transfer payments by approximately $200 billion. Answer the following questions, assuming the marginal propensity to consume was 0.75. What was the maximum change in GDP from the government spending? Show your work.
- Use the diagram to the right to answer the following: a. The equilibrium value of real GDP is $ trillion. (Enter your response as a whole number.) b. The MPC is equal to (Enter your response rounded to two decimal places.) c. The multiplier is equal to (Enter your response rounded to one decimal place.) d. What is the value of unplanned changes in inventories when real GDP has each of the following values? (Enter your responses rounded to one decimal place and include a minus sign if necessary.) GDP $10 trillion $12 trillion $14 trillion Unplanned Inventories trillion trillion trillion C Aggregate Expenditure, AE ($, trillions) 24.0- 22.0 ≈ ≈ ¦ CO 20.0- 18.0- 16.0- 14.0- 12.0+ 10.0- 8.0- 6.0- 4.0- 2.0- 0.0- O. 13.6 12.0 10.4 0 45° -~ 2 4 AE 10:12:14 10 12 14 16 18 20 22 24 6 8 Real GDP, Y ($, trillions) GConsider the following economy. What is the mpc in this economy? Planned Government Net Exports Aggregate Change in Real GDP (Y) Consumption (C) Investment (I') Purchases (G) (NX) Expenditures (AE) Inventories 10000 8200 800 11000 9000 600 12000 9800 13000 14000 15000 800 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 0.50 b 0.75 C 0.80 d 0.90Consider an economy described by the following equations. Y= C + I + GC= 100 + .75 (Y - T)I= 500 - 50rG= 125T= 100 Where: Y is GDP, C is consumption, I is investment, G is government spending, T is taxes and r is the rate of interest. Answer the questions based on the following equations above. a. What is the value of the multiplier? b. What is the equilibrium equation for Y? Show your solution. c. Suppose the Central Bank policy is to adjust the money supply to maintain the interest rate at 4 percent, so r=4. What is the value of output? Show your solution. d. Assuming that no change in fiscal policy, what is the effect of a reduction in interest rate from 4 percent to 3 percent on equilibrium output. Show your solution. e. In this case, explain the policy that was used by the policymaker to target the aggregate demand.
- Q1:You are given the following income-expenditures model for an economy : Consumption C = 300 + .64Yd Tax (T) = $60 Government expenditure G = $100 Investment (I) = $120 From above data calculate the follows: 1. Equilibrium level of income 2. At the equilibrium level of income, what is the amount of consumption?Silesia You are provided with the following information about an imaginary economy called Silesia. Use the information provided in the table to answer the questions below. Government expenditure 400 Exports 250 Autonomous imports 50 Autonomous consumption 150 Investment Expenditure 300 Full-employment output 2040 Marginal propensity to consume 0.75 Marginal propensity to import 0.15 Source: Bester, N. 2017. Tax rate 0.25 5.1 Derive and calculate the consumption function for the data provided. Show all formulas and calculations used. 5.2 Calculate autonomous spending. Show all formulas and calculations used 5.3 Calculate the multiplier. Show all formulas and calculations used. Round off your final answer to 1 decimal.Consumption = 115 + 0.6YInvestment = 550Use the above information to answer the questions that follow:1. Calculate the value of autonomous spending. 2.Calculate the value of the multiplier. ( 3.Calculate the equilibrium level of income.
- Real GDP Consumption Planned Investment Government Purchases Net Exports $5,000 $4,500 $500 $325 -125 6,000 5,300 $500 $325 -125 7,000 6,100 $500 $325 -125 8,000 6,900 $500 $325 -125 3 A Answer the questions based on the table below. The values are in millions of dollars. What is the equilibrium level of real GDP? What is the MPC? If potential GDP is $7,000 million, 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 should government spending increase so that the economy can move to the full employment level of GDP?You are given the following information about a closed economy with no government:Consumption = 115 + 0.6YInvestment = 550Use the above information to answer the question: Calculate the value of autonomous spending.You are given the following information about a closed economy with no government:Consumption = 115 + 0.6YInvestment = 550Use the above information to answer the question: Calculate the value of the multiplier.