Planned AE (PAE, trillion $) 06:-1 O 12:1 O 12-1 45° 6:1 AE = Y Refer to a graph above. Suppose the the economy has the planned aggregate expenditure of PAE₁ and planned investment is $2 trillion, government purchases is $2 trillion and net export is -$2 trillion. The macroeconomic equilibrium GDP is $ trillion. trillion and autonomous consumption is $ PAE₂= 7+0.5Y PAE = 5 +0.5Y PAE₁ = 3 +0.5Y Actual AE (GDP, Y, trillion $)

Planned AE (PAE, trillion $) 06:-1 O 12:1 O 12-1 45° 6:1 AE = Y Refer to a graph above. Suppose the the economy has the planned aggregate expenditure of PAE₁ and planned investment is $2 trillion, government purchases is $2 trillion and net export is -$2 trillion. The macroeconomic equilibrium GDP is $ trillion. trillion and autonomous consumption is $ PAE₂= 7+0.5Y PAE = 5 +0.5Y PAE₁ = 3 +0.5Y Actual AE (GDP, Y, trillion $)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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8 Aggregate planned expenditure. (trillions of 2009 dollars) a 7 15 14 15 16 17 18 O # 14 45° line less than $16 trillion. $16 trillion. more than $16 trillion. AE 19 In the above figure, equilibrium expenditure is some amount that cannot be determined without more information. Kk 4
6. When households opt to increase savings; consumption decreases from Co = 240 + 0.9YD to C = 140 + 0.9YD. Assume AS = 2p, I = 100, R = 100 + 0.1y, G = 50 and NX = 200 – 0.01Y – 0.1p. а. Provide two labelled diagrams with supporting calculations showing AS/AD and NS/NAF to illustrate how prices and real GDP and savings respond to this change. Show equilibrium y0, y1 and y2. Ignore long run considerations. b. Explain whether or not this example exhibits a Paradox of Thrift.
11. Critical analysis Q13 Suppose that when your income increases by $300, your consumption expenditures increases by $225. Your marginal propensity to consume (MPC) is . If your MPC was the same as the MPC for the economy as a whole, the expenditure multiplier for the economy would be Thus, a $5 million investment project would increase income by $ million in total.
20 Desired Consumption Expenditure 0 FIGURE 21-1 Y₁ 7₂ Real Disposable Income Select one: OA Y3F. OB. Y3D. OC DE OD. FD. OE Y2Y3. ID %₂ C-YA Consumption Function Refer to Figure 21-1. If disposable income is Y3, the level of desired saving is
Real GDP C G X-M 2500 1430 540 400 90 2400 1360 540 400 100 2300 1290 540 400 110 2200 1220 540 400 120 2100 1150 540 400 130
Planned AE (PAE, trillion $) 45° AE = Y PAE₂= 7+0.5Y PAE = 5 +0.5Y PAE = 3 +0.5Y Actual AE (GDP, Y, trillion $) Refer to a graph above. Suppose the the economy has the planned aggregate expenditure of PAE2 and the potential GDP is $10 trillion. Which of the following statements about this economy is false? O There is an inflationary output gap of $4 trillion. O In order for this economy to get back to the potential GDP, the PAE curve needs to shift to the right The economy is in an expansion. O The economy produces more than spends.
Co If the consumption function is of the form [C= 80 + 0.4 Y, the MPS equals Lütfen birini seçin. O A. 80 O B. -0.4. O C. 0.6. O D.04 O E.-0.6. Refer to the information provided in Table 22.4 below to answer the quesi
Real GDP Consumption (dollars) expenditure (dollars) 10 22.5 20 30 30 37.5 40 45 50 52.5 60 60 2 LAS 160 * SAS 150 140 130 120 AD 4 8 12 16 20 24 Real GDP (trillions of 2000 dollars) In the above table and figure, supposed that there is no import or proportional tax. To pull the economy back to the long-run equilibrium, the government can conduct a balanced budget operation by spending $ trillion. O 1) 1 O 2) 2 O 3) 4 4) 8 el (GDP deflator, 2000 = 100) Co
determine the equilibrium level of real GDP and the MPC.
Refer to the table. Planned Planned Consumption Saving Planned Real GDP Investment $6,000 $1,000 $1,000 $5,000 10,000 0 10,000 14,000 1,000 15,000 18,000 2,000 20,000 22,000 25,000 26,000 30,000 If real Gross Domestic Product (GDP) equals $25,000, what is the average propensity to save? OA. 0.0 OB. 0.88 OC. 0.12 OD. 0.56
.Refer to the information provided in Figure 8.9 below to answer the questions that follow AE 225 200 175 150 45 100 200 300 Aggregate output ($ millions) Figure 8.9 Refer to Figure 8.9. How will equilibrium aggregate expenditure and equilibrium aggregate output change as a result ?of a decrease in investment by $20 million AE line shifts down, increasing equilibrium output and equilibrium expenditure a O AE line shifts up, increasing equilibrium output and equilibrium expenditure b O AE line shifts down, decreasing equilibrium output and equilibrium expenditure .c O AE line shifts down, increasing equilibrium output and decreasing equilibrium expenditure .d O Aggregate expenditures ($ millions)
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