4. An economy's Planned Aggregate Expenditure (PAE) is given by the formula PAE = 3,400+ 0.6Y in terms of its autonomous and induced components respectively, where Y represents output. a. State what is meant by the terms autonomous and induced expenditure b. Given that, under Keynes, the economy is in short term equilibrium where Y=PAE, find the numerical level of short-run output using the above equation. c. If potential output in the same economy is 9,000 draw a Keynesian Cross diagram and label any gap which exists between actual and potential output.

4. An economy's Planned Aggregate Expenditure (PAE) is given by the formula PAE = 3,400+ 0.6Y in terms of its autonomous and induced components respectively, where Y represents output. a. State what is meant by the terms autonomous and induced expenditure b. Given that, under Keynes, the economy is in short term equilibrium where Y=PAE, find the numerical level of short-run output using the above equation. c. If potential output in the same economy is 9,000 draw a Keynesian Cross diagram and label any gap which exists between actual and potential output.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Fill this two tables ( question b and C)please fill only table
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Hi I need the second half to this problem thank you
Explanation
Consider the following planned aggregate expenditure function: AEp=1000+0.8Y 1. Calculate the income-expenditure equilibrim real GDP, Y*, for this economy. Illustrate the equilibrium real GDP on a diagram below. Label the equilibrium point E. 2. Explain how an increase in uncertainty due to the collapse of multiple banks in the economy affects consumption and firm investment spending. Also explain what effect these changes would have on AEp and Y*. Show the effect on your diagram in part 1. 3. Suppose following the events above consumption and investment spending change by 220. By how much would Y* change eventually? Calculate and explain. 4. If the federal government wants to get the economy back at producing Y* you found in part 1 by adjusting its purchases of goods and services (G) by how much would it have to change G? (Hint: use the multiplier to calculate).
The graph below shows a 45°-line (Keynesian cross) diagram. The economy is currently in macroeconomic equilibrium at output level Yo. Suppose that investment increases. 1) Use the line tool to show a possible position for the new aggregate expenditures line. Label this line AE2. Note: if you are not prompted for a label, you have used the wrong drawing tool. 2) Use the point drawing tool to show the new equilibrium levels of GDP and expenditures.Label this point 'B'. Real aggregate expenditures, AE Real GDP, Y Y = AE AE0 Q
Q.1 The government of Imaginia feels that the economy is in a slump, with rising unemployment - it aims to boost the economy to full employment level but realizes output has to increase by $1 billion to do so. A) The value of expenditure multiplier is 5, what amount does it have to spend to reach its goal? Would this amount guarantee such increase in output in all situations? B) Draw a money market and an AD/AS diagram to show how, through printing money the government can temporarily achieve the same objective. money, the government can temporarily achieve the same objective.
Answer b is not correct I am again says answer b is not correct
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