a. Find a numerical equation relating planned aggregate expenditure to output. Instructions: Enter your response for mpc rounded to one decimal place. PAE = + Y b. Construct a table to find the value of short-run equilibrium output. Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Output Planned aggregate expenditure (PAE) Y Y- PAE
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- An economy is described by the following equations: C= 60 +0.75 (Y - T) IP= 100 G= 150 NX= 30 T= 180 Y*= 760 The multiplier in this economy is 4. a. Find a numerical equation relating planned aggregate expenditure to output. Instructions: Enter your response for mpc rounded to two decimal places. PAE= b. Construct a table to find the value of short-run equilibrium output. Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Planned aggregate Output Y expenditure (PAE) Y - PAE 620 720 820 920 1,020 Short-run equilibrium output is c. By how much would government purchases have to change in order to eliminate any output gap? By how much would taxes have to change? In order to eliminate any output gap, government purchases would have to be reduced by In order to eliminate any output gap, taxes would have to be increased by d. If Y*=856, then by how much would government purchases have to change in order to eliminate any…An economy is described by the following equations: C = 80+ 0.9 (Y-7) IP = 100 G NX T = 180 Y* = 1,800 The multiplier in this economy is 10. a. Find a numerical equation relating planned aggregate expenditure to output. Instructions: Enter your response for mpc rounded to one decimal place. PAE = + Y = 150 Output Y = 30 b. Construct a table to find the value of short-run equilibrium output. Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. 1,780 1,880 1,980 2,080 2,180 Planned aggregate expenditure (PAE) Y- PAE Short-run equilibrium output is. c. By how much would government purchases have to change in order to eliminate any output gap? By how much would taxes have to change? In order to eliminate any output gap, government purchases would have to be (Click to select) reduced increased by . In order to eliminate any output gap, taxes would have to be (Click to select) increased reduced by . d. If y* = 2,070, then by…Which equation represents the macroeconomic equilibrium condition in the aggregate expenditure (AE) model?
- An economy is described by the following equations: C= 1500 + 0.75(Y - T) po = 800 G= 1500 X = 100 M=0 T=1500 †=0 Y* = 12000 a) Find a numerical equation linking planned aggregate expenditure to output. b) Find its exogenous expenditure and induced expenditure in this economyConsider the table on the right, which shows business investment in inventories for each quarter from the first quarter of 2007 to the first quarter of 2012, measured in millions of 2007 dollars. Provide a macroeconomic explanation for this pattern. (Hint: When did the recession during this period begin and end?) The negative growth of inventories indicates a period of OA. inflation since inventories needed to be reduced in the face of increasing storage cost OB. recession because demand was met by drawing down past inventories and production did not increase. OC. recovery since inventories needed to be used to meet demand. OD. recession because inventories increased due to lack of demand Year 2007 2008 2009 2010 2011 2012 2013 Quarter Q1 308889 Q2 Q3 Q4 R288828 Q1 Q2 Q3 Q4 Q1 228892889 Q2 Q3 Q4 Q1 Q2 Inventory Investment (millions of 2007 dollars) $3360 - 2822 15,570 19,644 6061 9512 11,856 4699 -2364 7779 -4807 - 4807 2663 2508 4841 -6805 8965 12,153 6462 2179 2061 7298 14,091 3875…An economy is described by the following equations: C = 1,800+ 0.6 (Y - T) IP = 900 G = 1,500 NX = 100 PAE= T = 1,500 y* = 9,000 a. Find a numerical equation linking planned aggregate expenditure to output. Instructions: Round the value for mpc to one decimal place. Y b. Find autonomous expenditure and induced expenditure in this economy. Instructions: Round the value for mpc to one decimal place. Autonomous expenditure: Induced expenditure:
- economics Consider a goods market equilibrium (The aggregate expenditure model) in a closed economy a) Equationally and graphically (using the graph above) show (define) a goods market equilibrium b) Explain which factor changes the slope of the ZZ(or D, demand) curve and which factors shift the ZZ curve c) Suppose that marginal propensity to consume is equal to 0.8. Explain how much an increase in government spending 500 million of dollars raises real output and why output increases more than government spending?Consider the planned aggregate expenditure diagram in the figure below. Planned Aggregate Expenditure (PAE, billions of $) PAE = Y 500 450 PAE 400 350 300 250 200 150 100 50 50 100 150 200 250 300 350 400 450 500 Actual Aggregate Expenditure (Y, billions of $) Instructions: Enter whole numbers into each box. a. What is the equilibrium level of output in this economy? |billion b. At an output level of $200 billion, planned aggregate expenditure is equal to $| likely to (Click to select) ♥ output in the upcoming year. billion and the economy is c. At an output level of $400 billion, planned aggregate expenditure is equal to $ likely to (Click to select) ♥ output in the upcoming year. |billion and the economy is (Click to select) increase decrease not changeNow assume you are examining a new economy. You learn that the mpc of this new economy is 0.75 and that the government wants to increase the level of output by $3000. What change in T achieves this desired change in Y? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a -$3000 b -$1000 C -$750 d $750
- a) About Country A, what is your estimate of the country's marginal propensity to consume (MPC) based on the following information on its GDP (Y) and the components thereof (in billion dollars) for two past years? Show calculation. Year 1 Year 2 c) GDP C I 11200 8000 2200 12000 8500 2400 G 800 880 The next few parts are about Country B, whose government plans to cut taxes by $24 billion as a measure to fight the current recession. The marginal propensity to consume (MPC) in Country B is known to be 34. There will be no crowding-out effect. e) NX 200 220 b) What is the initial effect (in billion dollars) of the tax cut on Country B's aggregate demand? (The "initial effect" here refers to the effect on AD after only the first round of increased spending.) What is the total effect of the tax cut on aggregate demand? Explain why it is different from the initial effect. d) How does the total effect of this $24 billion tax cut compare to the total effect of a $24 billion increase in…For the following economy, find autonomous expenditure, the multiplier, short-run equilibrium output, and the output gap. By how much would autonomous expenditure have to change to eliminate the output gap? C = 550 + 0.75 (Y – T ) I p = 200 G = 200 NX = 60 T = 180 Y* = 3,400 Instructions: Enter your responses as absolute numbers. Autonomous expenditure: 875Multiplier: 4Short-run equilibrium output: 3500 There is (Click to select) an expansionary output gap in the amount of 100.(DO THIS PART) Autonomous expenditure would need to decrease by________ to eliminate the output gap.Consider an economy where the aggregate planned expenditure (AE) components are given by: Consumption (C) = 1000 + 0.8Y Investment (I) = 200 Government Expenditure (G) = 250 Exports (Ex) = 400 Imports (Im) = 200 + 0.133Y Write the AE equation (simplified). Identify the autonomous component and the induced component. Graph the AE curve. Find and identify on the graph the equilibrium expenditure. Show on your graph the effect of an increase of 60 in government expenditure and find the new equilibrium expenditure. Find the expenditure multiplier.