5. Expenditure Gaps The following graph shows the planned expenditure line (AE) for an economy where current equilibrium income is $400 billion and full-employment income is $650 billion. REAL EXPENDITURE (Billions of dollars) 800 700 600 500 400 300 200 100 0 0 100 45-degree line The economy is experiencing the income gap would require a $ this economy is PE Full-Employment Income 200 300 400 INCOME (Billions of dollars) 500 600 700 800 billion O PE (?) billion. Closing in government spending. Thus the value of the multiplier for with the absolute value of the gap equal to $

5. Expenditure Gaps The following graph shows the planned expenditure line (AE) for an economy where current equilibrium income is $400 billion and full-employment income is $650 billion. REAL EXPENDITURE (Billions of dollars) 800 700 600 500 400 300 200 100 0 0 100 45-degree line The economy is experiencing the income gap would require a $ this economy is PE Full-Employment Income 200 300 400 INCOME (Billions of dollars) 500 600 700 800 billion O PE (?) billion. Closing in government spending. Thus the value of the multiplier for with the absolute value of the gap equal to $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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/se estion 5 Suppose you were looking at an economy where the consumption function is; C = 50 +0.75Y And you know that investors want to spend 500 at every level of income. In other words 1-500 a. What is the equilibrium level of income? b. If the full - employment level of income is 2000, is there a recessionary gap? If so, how large is the gap? c. What will happen to the equilibrium level of income if investors become pessimistic about the country's future and reduce their investment to 400? d. Is there an inflationary or recessionary gap now? How large? marks) Format Tools Table TV- BIU AV V T²v / pov
Is 3. Consumption function and non-income determinants The following graphs show an economy's initial position at point B along its consumption function C. Suppose disposable income suddenly and unexpectedly decreases. On the graph, shift either the C curve or the initial point on the C curve to show the impact of a fall in disposable income. Real Consumption Spending (Bilions of dollars) 0 Disposable Income (Billions of dollars) C 16 с 0 B Now suppose that there is an increase in the interest rate households are paid on money they save. On the following graph, shift either the C curve or the initial point on the C curve to show the impact of an increase in the interest
O Use the information in the following table to do exercises 8-15: 948 Y C $120 $300 $480 $700 sin $660 $100 $300 $500 JAZI I $20 $20 $20 $20 G $30 $30 $30 $30 X $10 -$10 -$30 -$50 1
Suppose that an economy consists of only two individuals. Trevor has $1150 available to spend on goods. He decides to purchase $210 worth of produce from Juanita in the current quarter. No other economic activity takes place during the current quarter. Using this information, answer the questions. For the current quarter, what is the economy's income? $ For the current quarter, what is the economy's expenditure? In an economy, how are income and expenditure related? Income is greater than expenditure. O Income is less than expenditure. They are unrelated. O They are equal.
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
Consumption expenditure (trillons of 2012 dollars) 25 45° line 20 15 Consumption funccion 10 E ua n e 10 15 20 Disporable income (crillions of 2012 dollars) 14
Match each definition to the appropriate component of aggregate demand. Definition The sum of the expenditures of business firms on new plant, equipment, and software and of households on new homes The goods and services purchased by all levels of government The total amount spent by consumers on newly produced goods and services The difference between exports and imports ⒸNet exports O Government spending Consumer Expenditure Which of the following components represents the largest piece of aggregate demand? O Consumer expenditure O Investment spending O Which of the following components represents the smallest piece of aggregate demand? O Consumer expenditure O Government spending O Investment spending ONet exports Investment Spending Government Spending Net Exports O O O O
27. Given this diagram, if Investment spending were to be reduced to 10, what would be the resulting equilibrium income? 28. Given this diagram, if G (government purchases of goods and services) were increased to 35, what would be the resulting equilibrium level of income?
Aggregate planned expenditure (trillions of 2009 dollars) 7 1 45° line AE2 AEO 2a) b) plan in th B A AE1 3a) 15 3 4 14 0 14 15 16 17 18 19 Real GDP (trillions of 2009 dollars) In the above figure the economy is initially at point A on the aggregate expenditure curve AEQ. Suppose investment decreases. As a result the AE curve shifts upward to a curve such as AE2. the AE curve shifts downward to a curve such as AE1. O there is a movement along AEO to a point such as B. O there is a movement along AEO to a point such as C. 5 6 7 81 90 100 109 b) T c) T d) It e) $1
T Normal 1 No Spac. Heading 1 Headin Paragraph Q1:You are given the following income-expenditures model for an economy: Consumption C = 300 + .64Yd Tax (T) = $60 %3D Government expenditure G= $100 Investment (I) = $120 %3D From above data calculate the follows: 3. At the equilibrium level of income, what is the amount of savings?
The table below provides income and consumption data in billions of dollars: Disposable Income Consumption Savings 100 80 --- 200 150 --- If the government increases spending by $5,000, then based on the data, GDP in this economy will increase by: A) $7,142.85 B) $22,000 C) $16,650 D) Cannot be answered
The table below provides Income and consumption Data in billions of dollars. Answer questions below based on it.Disposable Consumption SavingsIncome100 80 --------200 150 --------- What is the level of consumption when income is $300 billion? Group of answer choices $200 billion $240 billion $210 billion $60 billion