The economy is in equilibrium such that Planned Aggregate Expenditure (AE) = Aggregate Output (Y) = 1,200. We have earlier observed that when Y increased from 900 to 1,200 Aggregate Consumption (C) increased from 800 to 100O. If investments increase by 55, how much willI Aggregate Income change from its current value of 1,200?

11:04 AM ECON 122 CAT ONE.docX Phoenix Files QUESTION ONE Is it desirable for a country to have a large gross domestic product? Explain (2 marks) QUESTION TWO You are given data on the following variables in an economy Government spending 300 Planned investment Net exports Autonomous taxes Income tax rate Marginal propensity to consume 0.5 a) Consumption (C) is 600 when income (Y) is equal to 1500. Solve for autonom ous consumption (2 ma rks) ii) 200 S 50 b) Solve for the equilibrium level of output in the following two scenarios: i) There is an income tax t=0.1, Edit 0.1 250 Q Search © | 46| 472 [ 66 c) In the economy with an income tax of 10%, what is the budget balance of the government? (2 marks) O X: × There is no income tax in the economy. Denote these two variables by Yw and YN respectively. (4 marks) d) Solve for the change in net exports that would bring the equilibrium output lev el in the economy with the income tax to the level of YN that you found in part b. specify both…

Classify each of the following items as a final good or an intermediate good, and identify whether it is a component of consumption expenditure, investment, or government expenditure on goods and services: Item 1. Packing boxes bought by Amazon.com. Item 2. Starbuck's grande mocha frappuccino bought by a student. Item 3. A new limousine for the president. Item 4. New airplanes bought by United Airlines. Item 1 is and item 2 is O A. an intermediate good; a final good that is consumption expenditure B. a final good that is consumption expenditure; a final good that is consumption expenditure C. a final good that is consumption expenditure; a final good that is investment D. an intermediate good; a final good that is investment Item 3 is and item 4 is O A. an intermediate good; an intermediate good O B. a final good that is government expenditure; a final good that is investment O C. an intermediate good; a final good that is investment D. a final good that is government expenditure; an…

Use the initial settings (or any other non-zero value) for the Change in Autonomous Spending and MPC. Click the "Spending Rounds" button at the top of the Settings window. Which of the following describes how the Change in Spending value in each row is related to the Disposable Income value in the same row? O In each row, Change in Spending is Disposable Income minus MPC*(Change in Autonomous Spending). Change in Spending in each row is MPC x Disposable Income for that row. O Change in Spending is always half of Disposable Income. O Change in Spending is Disposable Income times the spending multiplier.

The table below shows disposable income and desired consumption for a hypothetical economy. Disposable income ($) 0 100 200 Select one: The marginal propensity to consume out of an increase in disposable income from $0 to $100 is. a. 0.75 b. 0.25 OC. 0.80 Consumption ($) d. 0.35 100 175 250 cross out cross out cross out cross out

Fill in the aggregate saving column in the following table. (Include a minus sign if necessary.) Aggregate Income, Y $0 100 200 300 400 500 600 Aggregate Consumption, C $200 250 300 350 400 450 500 The value of the MPC is one decimal place.) T Aggregate Saving, S $-200 150 100 50 0 50 100 (Round your response to CXIE DE Aggregate consumption, C Aggregate saving, S 700- 600- 500- 400 300- 200 100- 0 -100- -200- 300- -400- 100 200 300 400 500 Aggregate income, Y 600

In the GDP equation, business spending is referred to as: O Consumption Investment O Government O Net Exports

If Michelle's income is reduced to zero after she loses her job, her consumption will be and her saving will be O greater than zero; greater than zero O less than zero; greater than zero O greater than zero; less than zero O less than zero; less than zero

Economics

Suppose two successive levels of disposable personal income are $13.8 and $18.8 billion, respectively, and the change in consumption spending between these two levels of disposable personal income is $3.65 billion, then the MPS will be equal to O 0.25 O 0.27 O 0.35 O 0.65 O 0.73