[Related to the Solved Problem] Use the following data to calculate the values of equilibrium output and the investment spending multiplier: C=MPCX Y= 0.75× Y |= $2.5 trillion G = $1.9 trillion NX $0.5 trillion Equilibrium output is trillion. (Enter your response rounded to one decimal place.)
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- [Related to the Solved Problem] Use the following data to calculate the values of equilibrium output and the investment spending multiplier: C=MPCX Y=0.8 x Y /= $2.1 trillion G= $1.7 trillion NX= $0.5 trillion Equilibrium output is trillion. (Enter your response rounded to one decimal place.)21 Homework Unanswered Due Mar 17th, 11:59 PM → Important Suppose the initial change in spending is $12 billion. The indirect effects of that change cause a change in total spending of $24 billion. What is the mpc? Type your numeric answer and submitC = 450 + 0.4YI = 350G = 150X = 70Z = 35 + 0.1YT = 0.15YYf = 1550Q.2.1 Calculate the level of autonomous spending in this economy.Q.2.2 Calculate the size of the multiplier(Note: Round your answer to two decimal places)(4)Q.2.3 Calculate the equilibrium level of income(Hint: use the multiplier method)Q.2.4 Calculate the tax revenue to the government of this country when the economyremains in equilibrium.(2)Q.2.5 Calculate what the new equilibrium income should be if the government of thiscountry decides to cancel all taxes, implying the tax rate would now be 0%.(6)Q.2.6 Before the government decreased the tax rate, how much of governmentspending was required to bring the economy to full employment?
- (simple spending multiplier) for each of the following values for the MPC. Determine the size of the simple spending multiplier and the change in real GDP demanded following a $10 billion decrease in spending: a. MPC = 0.9 b. MPC = 0.75 c MPC = 0.6Suppose an economy with the following characteristics.Y = Real GDP or national incomeT = Taxes = 0.3YC = Consumption = 140 + 0.9(Y – T)I = Investment = 400G = Government spending = 800X = Exports = 600M = Imports = 0.15YGiven the information above, What is this economy’s spending multiplier?(Simple Spending Multiplier) For each of the following values for the MPC, determine the size of the simple spending multiplier and the total change in real GDP demanded following a $10 billion decrease in spending: MPC = 0.9 MPC = 0.75 MPC = 0.6
- Use the graph to illustrate the effects of a $10 billion increase in government spending. Assume that the economy is initially producing at full employment, and the spending multiplier (m³) is 10. 165 LRAS 160 155 150 145 140 135 130 125 AD 120 115 50 100 150 200 250 300 350 400 450 500 Real GDP How much of each additional dollar of income is devoted to consumption? MPC = $ Price level (P)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(Simple Spending Multiplier) For each of the following values for the MPC, determine the size of the simple spending multiplier and the total change in real GDP demanded following a $10 billion decrease in spending: a. MPC = 0.9 B. MPC = 0.75 C. MPC = 0.6
- 13. Assuming that an economy’s aggregate demand is given by its domestic consumption C and investment I, AD = C + I = c0 + c1Y + I. In the economy’s goods market equilibrium, this equals its output: AD = Y. Solving for Y this yields: Y = [1/(1 -c1 )] (c0+ I) Given this equation, which of the following statements is correct? 1. The multiplier is given by 1 – c1. 2. The boost in the economy’s output is the same, regardless of whether the aggregate demand shock comes from an increase in investment I or in autonomous consumption c0. 3. The larger the marginal propensity to consume (c1), the smaller the multiplier. 4. If c1 = 1/3, then a £1 million increase in investment would result in a £2 million increase in output. 14. In the US and the UK, loans are…#1 Consider an economy defined by the following (in $billions and price level is fixed): C = 25+ 0.6YD T = 10+ 0.15Y 1 = 30 G = 40 X = 15 M = 0.01Y a) What is the marginal propensity to spend and what is the aggregate expenditure multiplier?(03.08 MC) What will be impact of an income tax increase on an economy's consumption spending, real output, and unemployment in the short run? O Consumption will decrease, real output will decrease, and unemployment will increase. O Consumption will increase, real output will increase, and unemployment will decrease. O Consumption will increase, real output will decrease, and unemployment will increase. Consumption will increase, real output will increase, and unemployment will decrease. Consumption will decrease, real output will decrease, and unemployment will decrease.