Exhibit 8-6 Aggregate expenditures function c. Real consumption and investment expenditures (trillions of dollars per year) $1 trillion. $2 trillion. $3 trillion. e. $6 trillion. d. 32 5 2 1 8 7 21. As shown in Exhibit 8-6, autonomous consumption is: a. 0. b. 8 45 0 1 2 3 4 5 6 7 8 9 Real disposable income (trillions of dollars per year) C+1
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- If real GDP is $2200 billion, the GDP deflator is 110, nominal net exports are $100 billion, nominal investment is $200 billion, and nominal government expenditures are $400 billion, what is nominal consumption? 1) $1300 2) $1500 3) $1520 O 4) $1720Given the following consumption function, C = 400 + 0.75YD,where C= consumption expenditure, YD = disposable income, Investment= $1200, Government spending = $1600,Exports = $500, Imports = $600, Taxes = $1200 and Potential GDP = $9000Choose corrcct optiona) Aactual output is less than potential outputb) actual output is zeroc) actual output is equal to potential outputd) actual output is higher than potential output16. Find consumption expenditure from the following National Income =Rs. 5000 Autonomous Consumption = Rs. 1000 Marginal Propensity to Consume = 0.8 %3D
- 2. In macroeconomic theory, total or aggregate spending is denoted by A and total or aggregateproduction of income by Y. Which one of the following statements is incorrect? A When A is greater than Y, there is disequilibrium and Y will tend to increase.B When A is equal to Y, there is equilibrium and Y will remain unchanged.C When A is less than Y, there is disequilibrium and Y will decrease.D When A is greater than Y, there is disequilibrium and A will decrease.1.In Figure 1, when disposable income is 0, how much is consumption, saving, autonomous consumption, and induced consumption? 2.In Figure 1, when disposable income is 2500, how much is consumption, saving, autonomous consumption, and induced consumption? 3.In Figure 1, when disposable income is 4,000, how much is the consumption, savings, autonomous consumption and induced consumption?The gross domestic product (GDP) of Country A is $2 trillion in year 1. What value of investment will increase its GDP to $4.5trillion in year 2? (present your result in the nearest billion dollars, i.e., no decimal places) Assume that the average disposable income and consumption (in real $) of this country's citizen are provided in the table below. Year Income Consumption 1 60,000 50,000 64,726 51,259
- Gross Real GDP (after taxes) Investment $10 10 ITTIT 20 10 10 10 10 10 10 40 70 100 130 160 Consumption $-20 100 K Net exports +5 45 Government purchaies $15 7. Refer to the above table. If the full-employment real GDP is $70 the 15 15 15 15 15 15 OA) A. inflationary expenditure gap is $30. OB) B. recessionary and inflationary expenditure gaps are both $0. OC) C. inflationary expenditure gap is $10. OD) D. recessionary expenditure gap is $10.5 The graph shows aggregate expenditures for the fictitious country of Carpistan. Suppose the government of Carpistan increases government expenditures in order to boost the economy. Move the appropriate curve or curves to show the effect of this increase. Next, place point A to show where actual aggregate expenditures equals planned aggregate expenditures. Aggregate Expenditures (AE) 10 9 5 0 1 3 4 D Real GDP (Y) 16 7 11 YAB AR 2.0 10GDP $0 1 2 Consumption $0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 D 8 4.5 As shown in Exhibit 9-1, if equilibrium GDP is $5 trillion, then the total of investment, government spending, and net exports is: 8 4.5 As shown in Exhibit 9-1, if equilibrium GDP is $5 trillion, then the total of investme O $1 trillion. $2 trillion. O $3 trillion. O $4 trillion. $6 trillion. 4 Aggregate Expenditures 6 Unplanned inventory
- Refer to the above table. Suppose investment is $12 billion and the economy revises its saving plans so as to save $4 billion more at all levels of income. The new equilibrium GDP will be: Domestic Output or Income (GDP = DI) $240 250 260 270 280 290 300 310 320 a. $270 billion b. $280 billion $260 billion $290 billion O c. O d. Clear my choice Consumption $244 250 256 262 268 274 280 286 292The table below provides income and consumption data in billions of dollars: Disposable Income Consumption Savings 100 80 --- 200 150 --- What is the level of consumption when income is $300 billion? A) $200 billion B) $240 billion C) $210 billion D) $60 billion. Suppose an economy is represented by the following equations.Consumption function C = 100 + 0.8YdPlanned investment I = 38Government spending G = 75Exports EX = 25Imports IM = 0.05YdAutonomous Taxes T = 40Planned aggregate expenditure AE = C + I + G + (EX - IM)a. By using the above information calculate the equilibrium level of income for thiseconomy. b. Calculate the value of expenditure multiplier. c. Suppose that government spending is increased by 5, what will happen to theequilibrium income level?