uan owns a pizza shop. In 2021, Juan spent $20,000 upgrading the oven. This is an example of _____ A. consumption B. investment C. government spending D. taxation
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Juan owns a pizza shop. In 2021, Juan spent $20,000 upgrading the oven.
This is an example of _____
A. consumption
B. investment
C. government spending
D.
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- You are told that taxes in this economy are equal to 100. What is the value of autonomous consumption? Planned Government Net Exports Aggregate Change in Real GDP (Y) Consumption (C) Investment (1') Purchases (G) (NX) Expenditures (AE) Inventories 1500 1100 250 1600 1175 100 1700 1250 1800 1900 2000 75 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 50 75 100 d. 12517. Suppose MPC = 0.6, and G increases by $350 and Tax increases by $350 simultaneously. How much would GDP change? (NOTE: Refer to your answers from #14 & #15) 18. Suppose MPC = 0.8, and the government intends to increase GDP by $300. To achieve the goal, tax must (increase decrease ) by $Why will a temporary tax increase be insignificant in reducing consumption expenditures by the amount expected a) Because people viewed the tax increase as permanent. b) Because people chose to increase their saving. c) Because people viewed the tax increase as temporary. d) consumption expenditures are not related to the level of taxation.
- Assume that a nation's marginal propensity to consume (MPC) is 0.75. A highiy productive, cost-cutting technology is developed for the production of commercial airplanes. The total industry expenditure in this nation is $100 million for the immediate acquisition and adoption of this technology. (a) For this nation, identify and explain how much this spending on new technology will change each of the following in the first round: i. Income (GDP) L. Saving i. Consumption (b) Assuming a closed economy and no leakages, identify and explain how much this spending on new technology will change each of the following at the end of the final round: i. Income (GDP) ii. Saving li. Consumption不 Fill in the missing values in the following table. Assume that the value of the MPC does not change as real GDP changes and that there are zero taxes. (Enter all values as whole numbers.) Real GDP () Consumption (C) Planned Investment (/) Government Purchases (G) Net Exports (NX) $15,000 $10,500 $1,500 $1,300 - $375 $16,000 $11,200 $1,500 1,300 - $375 $17,000 $1,500 1,300 - $375 $18,000 $1,500 1,300 - $375 $19,000 $ $1,500 1,300 - $3754. In the economy of St. Maynard Island, autonomous consumption expenditure is $185 million, and the marginal propensity to consume is 0.75. Investment is $150 million, government expenditure is $100 million, and net taxes are $80 million. Investment, government expenditure, and taxes are constant - they do not vary with income. The island does not trade with the rest of the world. a) What is the consumption function? b) What is the aggregate expenditure function? c) What is the island's autonomous aggregate expenditure? d) What is the size of the multiplier in St. Maynard Island's economy? e) What is the island's aggregate planned expenditure and what is happening to inventories when real GDP is $1,100 million? f) What is the economy's equilibrium aggregate expenditure?
- Fl in the missing blanks in the folowing table. Assume for simplicity that taxes are zero. Also assume that the values represent bilions of dollars. National Income and Consumption (C) Saving (S) Real GDP (Y) $12,000 $10,800 $13,000 $11,700 $14,000 $12,600 $15,000 $13,500 $16,000 $14,400 In the above example, the marginal propensity to consume is (Enter your response rounded to two decimal places) In the above example, the marginal propensity to save is (Enter your response rounded to two decimal places)-1. If imports are $2 trillion, exports are $1.9 trillion, consumption is $3.8 trillion, investment is $700 billion, and government spending is $1.1 trillion, how much is GDP? 2. If consumption is $2.5 trillion, investment is $900 billion, government spending is $700 billion, imports are $1.2 trillion and exports are $1.4 trillion, how much is GDP? Example: If GDP rises from $6 trillion in 1994 to $8 trillion in 1999 and the GDP deflator in 1999 is 110, find real GDP in 1999 and find the percentage increase in real GDP between 1994 and 1999. First, we are asked to find real GDP in 1999. To do this we divide the nominal GDP, which is $8 trillion ($8,000 billion), by the GDP deflator for 1999, which is 110. This then is multiplied by 100. Real GDP in 1999 is $7,273 billion or $7.2 trillion. To find the percent change you must find the difference of real GDP between 1999 and 1994. Change in GDP = 7,232 – 6,000 = 1,232 You then take this difference and divide it by GDP in…4. In the economy of St. Maynard Island, autonomous consumption expenditure is $185 million, and the marginal propensity to consume is 0.75. Investment is $150 million, government expenditure is $100 million, and net taxes are $80 million. Investment, government expenditure, and taxes are constant - they do not vary with income. The island does not trade with the rest of the world. a) What is the consumption function?
- MPC is 0.875. When tax increases by $1, GDP will decrease by $8. O by $1, GDP will decrease by $7. by $1, GDP will increase by $8. by $1, GDP will increase by $7.Use the information below to answer the following questions. Suppose that in China, investment is ¥190 billion, saving is ¥170 billion, government expenditure on goods and services is ¥195 billion, exports are V230 billion, and imports are *270 billion (Y is yuan, the currency of China). The government received billion in tax revenues. The government has a budget investment by and investment. equal to billion which is exerting a(n) the demand for loanable funds, which influence on the real interest rateFill in the missing values in the following table. Assume that the value of the MPC does not change as real GDP changes and that there are zero taxes. (Enter all values as integers.) Real GDP (Y) Consumption (C) Planned Investment (1) Government Purchases (G) Net Exports (NX) $11,000 - $275 $12,000 - $275 $13,000 - $275 $14,000 - $275 $15,000 - $275 Now use the table to find aggregate expenditure and the unplanned change in inventories. Real GDP (Y) $11,000 $12,000 $5,500 $6,000 $ Consumption (C) $5,500 $6,000 Planned Investment (1) $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 Government Purchases (G) $1,200 1,200 Net Exports (NX) - $275 - $275 $1,200 1,200 1,200 1,200 1,200 Planned Aggregate Expenditure (AE) $ Unplanned Change in Inventories