The information below represents values for the various market participants. C= $100+ 0.8Yd lg = $50 G = $60 X = $120 M = $190 a) Assuming that the full-employment level of output is $1000: i. what kind of gap exists? ii. What is the size of the gap? b) How much are consumers saving at full employment? I c) What is the equilibrium value for a public open economy?
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- The information below represents values for the various market participants. E= $25 + 0.75Yd l = $50 G = $70 X = $140 M = $130 a) Assuming that the full-employment level of output is $500: i. what kind of gap exists? ii. What is the size of the gap? b) How much are consumers saving at full employment? c) What is the equilibrium value for a public open economy? d) What is the equilibrium value for a public closed economy? e) What is the value of our multiplier?The following information is provided about an open economy with a government. Use the information to answer the questions that follow:C = 375 + 0.6YI = 200G = 150X = 50Z = 30 + 0.1YT = 0.15YYf = 1 335.10 Show all your formulasQ.1.1 Calculate the level of autonomous spending in this economy. (2)Q.1.2 Calculate the size of the multiplier.(Note: Round your answer to two decimal places.)(3)Q.1.3 Calculate the equilibrium level of income. (2)Q.1.4 Calculate the change in government spending required to reach full employment in the economy.(3The data in columns 1 and 2 in the table below are for a private closed economy. (1) (2) (3) (4) (5) (6) Aggregate Expenditures, Private Closed Aggregate Expenditures, Private Open Economy, Billions Real Domestic Output (GDP = DI), Billions Exports, Billions Imports, Billions Net Exports, Billions Economy, Billions $350 $390 $20 $30 400 430 20 30 450 470 20 30 500 510 20 30 550 550 20 30 600 590 20 30 650 630 20 30 700 670 20 30 a. Use columns 1 and 2 to determine the equilibrium GDP for this hypothetical economy. 2$ billion b. Now open up this economy to international trade by including the export and import figures of columns 3 and 4. Fill in the gray- shaded cells in columns 5 and 6. Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. What is the equilibrium GDP for the open economy? 2$ billion What is the change in equilibrium GDP caused by the addition of net exports? 2$…
- The data in columns 1 and 2 in the table below are for a private closed economy. (1) Real Domestic Output (GDP = DI), Billions (2) Aggregate Expenditures, Private Closed Economy, Billions (3) Exports, Billions (4) Imports, Billions (5) Net Exports, Billions (6) Aggregate Expenditures, Private Open Economy, Billions $300 $340 $20 $30 350 380 20 30 400 420 20 30 450 460 20 30 500 500 20 30 550 540 20 30 600 580 20 30 650 620 20 30 a. Use columns 1 and 2 to determine the equilibrium GDP for this hypothetical economy. $________billion b. Now open up this economy to international trade by including the export and import figures of columns 3 and 4. Fill in the gray-shaded cells in columns 5 and 6. What is the equilibrium GDP for the open economy? $_______ billion What is the change in equilibrium GDP caused by the addition of net exports? $_______billion c. Given the original $20 billion level of exports, what…Problem 1: You are given the following model for the economy of a country: Consumption function: C=2000+0,75-YDI Investment function: I=10500 Government spending: G = 12000 Tax function: T=200+0,4·Y - Disposable income: YD = Y -T+TR Transfer: 1000 a) What is the level of equilibrium output? b) What is the new equilibrium output if investment decreases by 2 000 units? c) How much does the government collect in taxes when the economy is in equilibrium? d) What is level of the government’s budget? e) Calculate the tax multiplier? f) Calculate consumption at the equilibrium output.The data in columns 1 and 2 in the table below are for a private closed economy. (1) (2) (3) (4) (5) (6) Real Domestic Output (GDP = DI), Billions Aggregate Expenditures, Private Closed Economy, Billions Net Exports, Billions Aggregate Expenditures, Private Open Economy, Billions Exports, Billions Imports, Billions $150 $190 $30 $20 200 230 30 20 250 270 30 20 300 310 30 20 350 350 30 20 400 390 30 20 450 430 30 20 500 470 30 20 a. Use columns 1 and 2 to determine the equilibrium GDP for this hypothetical economy. $ billion b. Now open up this economy to international trade by including the export and import figures of columns 3 and 4. Fill in the gray- shaded cells in columns 5 and 6. Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. What is the equilibrium GDP for the open economy? billion What is the change in equilibrium GDP caused by the addition of net exports? billion c.…
- Question 2 The following information is provided about an open economy with a government. information to answer the questions that follow: C = 450 + 0.4Y |= 350 G = 150 X = 70 Z = 35 + 0.1Y T= 0.15Y Yf = 1550 Q.2.1 Calculate the level of autonomous spending in this economy. Q.2.2 Calculate the size of the multiplier (Note: Round your answer to two decimal places) Q.2.3 Calculate the equilibrium level of income (Hint: use the multiplier method)The following information is provided about an open economy with a government. Use theinformation to answer the questions that follow:C = 450 + 0.4YI = 350G = 150X = 70Z = 35 + 0.1YT = 0.15YYf = 1550 Q.2.4 Calculate the tax revenue to the government of this country when the economy remains in equilibrium.Q.2.5 Calculate what the new equilibrium income should be if the government of this country decides to cancel all taxes, implying the tax rate would now be 0%.Q.2.6 Before the government decreased the tax rate, how much of government spending was required to bring the economy to full employment?The following information is provided about an open economy with a government. Use the information to answer the questions that follow:C = 450 + 0.4Y I = 350G = 150X = 70Z = 35 + 0.1Y T = 0.15YYf = 1550Q 2.4 Calculate the tax revenue to the government of this country when the economy (2) remains in equilibrium.Q 2.5 Calculate what the new equilibrium income should be if the government of this (6) country decides to cancel all taxes, implying the tax rate would now be 0%.Q2.6 Before the government decreased the tax rate, how much of government spending was required to bring the economy to full employment?
- Assume that the economy can be modeled as follows: AE = C + I + G C = 300 + .6Yd I = 400 G = 100 T = 200 y= 1700 consumption = 1200 4) What is the level of private saving in equilibrium? 5) What is the level of public saving in equilibrium? 6) What is the level of aggregate saving in equilibrium? 7) Imagine the government would like to increase equilibrium GDP to 2,000, what would it have to set the level of government spending to? 8) What is the size of the spending multiplier? 9) What is the size of the tax multiplier?Suppose the following equations represents a closed economy: Y= C + I + G Y = 4000 G = 500 T = 500 C = 500 + 0.7 (Y – T) I = 1000 – 40r In this economy, compute the value of consumption (C), private saving, public saving, and national saving. Also, find the equilibrium interest rate (r). Now suppose that government spending (G) rises (expansionary fiscal policy) to 300. Compute private saving, public saving, and national saving. Also, find the new equilibrium interest rate (r). In part (b), due to expansionary fiscal policy (increase in government spending), which of the two other components of aggregate demand changes, C or I? Why? (Hint: Note the real interest rate)Problem 1. The following equations characterize country's economy. Assume that the economy is a closed economy. Production function: Y = A·K'N – 3·N²/2. where A = 5 and K = 21. Labor supply: N$ = 5 + 3w. Desired Consumption: Cd = 56 +0.75Y – 100r Desired Investment: Iª = 130 – 900r Government Spending: G = 300 (a) Find the equilibrium levels of the real wage, employment and output (you may want to go back and read your notes on labor market). (b) Find the equilibrium level of the real interest rate, consumption, investment and national saving. (c) Illustrate your answers to parts (a)and (b) with appropriate graphs. (d) Suppose that due to a wave of immigration, labor supply increases. The new labor supply curve is given by Labor supply: N$ = 25 + 3w. Find the new equilibrium values of the real wage, employment, output, the real interest rate, investment, saving and consumption. Illustrate these new answers in the graphs that you drew for part (c).