use the following equation. C = 50 + 0.6(Y – T) 9) What is autonomous consumption in this economy? a) 0.4 b) 0.6 c) 30 d) 50 10) What is the government spending multiplier for this economy? a) -1.5 b) 1.5 c) -2.5 d) 2.5 11) If the government spends 20 more then what happens to consumption? a) increases by 50 b) decreases by 50 c) increases by 30 d) decreases by 30 12) In this economy we know that lowering taxes by 10 a) affects real GDP the same as increasing government spending by 10 b) affects real GDP more than increasing government spending by 10 c) affects real GDP less than increasing government spending by 10 d) affects real GDP but cannot be compared to government spending at all

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The simple economy of Altria shown in the table below has no government or taxes and no international trade. Its investment is autonomous and its MPC is constant. a. Complete the table below. Remember to use a minus (-) sign to indicate negative values. Y S I AE 500 0 750 1,500 2,250 3,000 3,750 с 500 1,000 0 750 b. The value of expenditures equilibrium is $ c. The value of the multiplier is

1) Determine the value of the multiplier for this economy, and find the equilibrium value of Y.

On the following graph illustrate the impact of a sudden decline in consumer confidence that reduces autonomous consumption by $50 billion. Assume MPC = 0.8. 2. (a) What is the new equilibrium level of real output? (Don't forget the multiplier.) (b) How large is the real GDP gap? (c) What has happened to average prices? AS AD 50100 200 300 400 500 600 700 REAL OUTPUT (in billions of dollars per year) PRICE LEVEL (average price)

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Question 1 Use the following equations to answer the questions below. The Peruvian economy can be characterized by these equations below. C = 400+ 0.6Yd Taxes = 600 Equilibrium Output = $4,000 a) Graph the consumption function in the income/output and aggregate expenditures space. Label your horizontal axis income/output (Y) and your vertical axis (AE). Label the vertical intercept and at least one other coordinate on the consumption function. What is the sum of investment and government purchases at equilibrium? Show your work. b) c) d) What is the equation for aggregate expenditure? Graph the aggregate expenditure function in the same graph from (a). Label the vertical intercept and equilibrium. At equilibrium, what is the level of saving in Peru? Show your work. On a separate graph, draw the saving function. Label your horizontal axis income/output (Y) and your vertical axis saving (S). Label the vertical intercept and horizontal intercept. e) The President of Peru hires you as an…

Income Expenditures 0 100 100 150 200 200 300 250 Refer to the table above to answer the following: (a) At an income level of $200, how much is autonomous expenditures and how much is induced? (b) Given the expenditures function AE = $4,000 + 0.6Y and income of $1,000, how much is spent and how much is induced?

Equations for C, I, G, and NX are given below. If the equilibrium level of GDP is $32,000, what will the new equilibrium level of GDP be if government spending increases to 2,500?C = 5,000 + (MPC)YI = 1,500G = 2,000NX = -500