Suppose that autonomous consumption (a) is 300, private investment spending (I) is 420, government spending (G) is 400, Net taxes (T) are 400 and marginal propensity to consume (b) is 80 %, and marginal tax rate (t) is 25 %. By using the above information: Find the equilibrium value of national income and show it on a graph

Suppose that autonomous consumption (a) is 300, private investment spending (I) is 420, government spending (G) is 400, Net taxes (T) are 400 and marginal propensity to consume (b) is 80 %, and marginal tax rate (t) is 25 %. By using the above information: Find the equilibrium value of national income and show it on a graph

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter9: Aggregate Expenditures

Section: Chapter Questions

Problem 7E

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Suppose that autonomous consumption (a) is 300, private investment spending(I) is 420, government spending (G) is 400 , Net taxes (T) are 400 and marginal propensity to consume (b) is 80 %, and marginal tax rate (t) is 25 % . By using the above information Find the equilibrium value of national incomeand show it on a graph.
Consider the hypothetical country of Kejimkujik. Suppose that national income in Kejimkujik is $300 billion, households pay $100 billion in taxes, household consumption is equal to $160 billion, and the marginal propensity to consume (MPC) is 0.6. On the following graph, use the blue line (circle symbol) to plot the economy's consumption function. Consumption Function050100150200250300350400450500500450400350300250200150100500CONSUMPTION (Billions of dollars)DISPOSABLE INCOME (Billions of dollars) Suppose now that Kejimkujik’s national income increases to $330 billion. Assuming the amount paid in taxes is fixed at $100 billion and that MPC = 0.6, what is the new amount of household consumption? $148 billion $219.4 billion $220.6 billion $178 billion
Suppose that autonomous consumption (a) is 200, private investment spending (I) is 340, government spending (G) is 300 , Net taxes (T) are 300 and marginal propensity to consume (b) is 80 %, and marginal tax rate (t) is 25 % . By using the above information: a) Find the equilibrium value of national income (you can take the approximate value if necessary b) Find out the effects of an increase in government expenditure by100 c) Just find the new national income equilibrium level when marginal tax rate is increased to 30 % and marginal propensity to consume is increase to 0.9. (you can give the numerical value approximately
Suppose that autonomous consumption (a) is 300, private investment spending (I) is 420, government spending (G) is 400 , Net taxes (T) are 400 and marginal propensity to consume (b) is 80 %, and marginal tax rate (t) is 25 % . By using the above information: a) Find the equilibrium value of national income and show it on a graph. b) Suppose that the potential income level is 2500 in the economy. In this case, what kind of fiscal policy you can use to reach the full employment level. (show this numerically and explain it on your graph) Thank you.
Suppose that autonomous consumption (a) is 200, private investment spending (I) is 340, government spending (G) is 300, Net taxes (T) are 300 and marginal propensity to consume (b) is 80 %, and marginal tax rate (t) is 25 %. By using the above information: a) Find the equilibrium value of national income (you can take the approximate value if necessary b) Find out the effects of an increase in government expenditure by100 c) Just find the new national income equilibrium level when the marginal tax rate is increased to 30 % and the marginal propensity to consume is increasing to 0.9. (you can give the numerical value approximately )
Suppose that autonomous consumption (a) is 300, private investment spending (I) is 420, government spending (G) is 400 , Net taxes (T) are 400 and marginal propensity to consume (b) is 80 %, and marginal tax rate (t) is 25 % . By using the above information: a)Find the equilibrium value of national income and show it on a graph b) Suppose that the potential income level is 2500 in the economy. In this case, what kind of fiscal policy you can use to reach the full employment level. (show this numerically and explain it on your graph)
In a simple economy (assume there are no taxes, thus Y is disposable income), the consumption function is C= 100 +0.75Y Investment is equal to 400. In this economy, equilibrium GDP is $ (Round your answer to the nearest dollar) 1.) Using the point drawing tool, on the graph to the right, indicate the real GDP point that you found above Label the point 'E' 2) Using the line drawing tool, carefully graph the consumption plus investment line Properly label your line Carefully follow the instructions above, and only draw the required objects
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Suppose an economy is described by the following equations: Y = C + I + G + X – M C = 14 + 0.60Yd I = 20 G = 20 X = 15 M = 5 +0.1Y T = 20 + 0.4Y Where Y is domestic income Yd is private disposable income C is aggregate consumption spending T is government tax revenue I is investment spending G is government spending E represents exports M represents imports of goods and services. (a) Find out the equilibrium value of income. (b) What is the value of export multiplier?
Suppose an economy is described by the following equations: Y = C + I + G + X – M C = 14 + 0.60Yd I = 20 G = 20 X = 15 M = 5 +0.1Y T = 20 + 0.4Y Where Y is domestic income Yd is private disposable income C is aggregate consumption spending T is government tax revenue I is investment spending G is government spending E represents exports M represents imports of goods and services. (a) If the equilibrium national income is less than the full-employment level of income by N$100, what should be the increase in government spending or in exports to attain the full-employment level of income? (b) With a help of a diagram explain and discuss life cycle hypothesis.
Q3 In a simple macroeconomic model, the value of national income Y may be found by solving the system: G= 250 (government expenditure) T= 50 (taxation) I= 100 (planned investment) C = 0.75Yd + 150 (consumption) where disposable income Yd = Y – T. (a) Calculate the equilibrium level of national income. (b) Calculate the total increase in government expenditure and investment needed to increase the equilibrium level of national income by 20.
Consumption function: C=500+0.8Yd , net tax: T=500, government spending: G=500, investment: I=1200, export: X=500 and imprt: M=700. According to this Calculate the equilibrium level of output(Ye)