Refer to the information provided in Figure 8.12 below to answer the questions that follow.AEAEAE1,000B60027045A 1,000 1,500Aggregate output ($ millions)Figure 8.12Refer to Figure 8.12. Suppose the economy's aggregate expenditure line is AE 1. A$10 million increase in planned investment causes aggregateequilibrium output to increase toSelect one:O a $1.010.0 million.O b. $1.016.7 million.O. $1,125.5 million.O d. $1.215.6 million.(suou )sampuacha apubay

The aggregate output (Y) in the economy is multiplier (m) times the autonomous part of aggregate…

Refer to the information provided in Figure 8.12 below to answer the questions that follow. AE AE AE 1,000 B 600 270 45 A 1,000 1,500 Aggregate output ($ millions) Figure 8.12 Refer to Figure 8.12. Suppose the economy's aggregate expenditure line is AE . A$10 million increase in planned investment causes aggregate equilibrium output to increase to Select one: O a $1.010.0 million. Ob. $1.016.7 million. Oc $1.125.5 million. Od. $1.215.6 million. (suou s) sampuada apuba£by

Refer to the information provided in Figure 8.12 below to answer the questions that follow. AE AE AE 1,000 B 600 270 45 A 1,000 1,500 Aggregate output ($ millions) Figure 8.12 Refer to Figure 8.12. Suppose the economy's aggregate expenditure line is AE . A$10 million increase in planned investment causes aggregate equilibrium output to increase to Select one: O a $1.010.0 million. Ob. $1.016.7 million. Oc $1.125.5 million. Od. $1.215.6 million. (suou s) sampuada apuba£by

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 1.3P

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.Refer to the information provided in Figure 8.9 below to answer the questions that follow AE 225 200 175 150 45 100 200 300 Aggregate output ($ millions) Figure 8.9 Refer to Figure 8.9. How will equilibrium aggregate expenditure and equilibrium aggregate output change as a result ?of a decrease in investment by $20 million AE line shifts down, increasing equilibrium output and equilibrium expenditure a O AE line shifts up, increasing equilibrium output and equilibrium expenditure b O AE line shifts down, decreasing equilibrium output and equilibrium expenditure .c O AE line shifts down, increasing equilibrium output and decreasing equilibrium expenditure .d O Aggregate expenditures ($ millions)
1. According to the Bureau of Economic Analysis, during therecession of 2007–2009, household saving as a fraction of dis-posable personal income increased from a low of just over1 percent in the first quarter of 2008 to 5 percent in the secondquarter of 2009. All else equal, what impact would this changein saving have on the MPC, MPS, and multiplier? How wouldthis change affect equilibrium output when planned invest-ment changes? 2. Assume in a simple economy that the level of saving is –500 whenaggregate output equals zero and that the marginal propensity tosave is 0.2. Derive the saving function and the consumption func-tion, and draw a graph showing these functions. At what level ofaggregate output does the consumption curve cross the 45° line?Explain your answer and show this on the graph.
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Suppose that Dell Corporation has 20,000 computersin its warehouses on December 31, 2019, ready tobe shipped to merchants (each computer is valued at$500). By December 31, 2020, Dell Corporation has25,000 computers ready to be shipped, each valuedat $450.a. Calculate Dell’s inventory on December 31, 2019.b. Calculate Dell’s inventory investment in 2020.c. What happens to inventory spending during theearly stages of an economic recession?
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Assume in a simple economy that thc level of saving is -500 when aggregate ourput equals zero and that the margina! propensity to save is 0.2. Derive the saving function and the consumption function, and draw a graph showing these func- tions. At what level of aggregate ouiput does the consumption curve cruss the 45° line? Explain your answer and show this un the graph.
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10.pr3 Following is a saving and investment schedule indicating that planned investment is constant 360 11 13 15 17 15 15 15 15 15 a) The equilibrium real GDP is $And saving and investment are both b The MPS and the multiplier is AS2 rise in the g schedule will cause real GDP to tie by S d) Use the investment schedule given in the table and assume a 52 increase in the saing schedule in the table that is, saving at every real GOP increase by S and at this real GOP, saving 4.1. Equilibrium real GDP will to.5 15 will be S d.2. The amount by which real GDP changes depends on the size of the change in the saving schedule and the size o
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A AI PO© .. 3.71K/s O il.l 93% 5:13 AM HPS2125.220.ASIGNMENT-Unsaved 1 a) The following data relate to the economy of XYZ Shilling "million" Investment 4,000 Government Spending 10,000 Autonomous consumption 8,000 Net exports 3,600 The marginal propensity to save of the economy of country XYZ is 0.4 Required: i) Write the consumption function of the economy. i) Compute the equilibrium level of income in the economy. QUESTION TWO a) Suppose the aggregate demand and supply schedules for a hypothetical economy are as shown below: Amount of real Amount of real domestic Price level domestic output supplied, billions output demanded, billions $ 200 (price index) 300 $800 400 250 800 600 200 600 S00 150 400 1,000 100 200 @ Use these sets of data to graph the aggregate demand and supply curves on the below graph. (i) What will be the equilibrium price and output level in this hypothetical economy? Is it also the full-enmployment level of outpur? Explain. (i) Why won't the 150 index be the…