Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 36, Problem 3TY
(a)
To determine
Find equilibrium GDP, the budget deficit or surplus, and the
(b)
To determine
Changes in exports and imports when currency appreciates.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
1. Answer the following:
A) In 2011 the United States economy had a GDP of $14,991 billion according to the United
Nations. If consumption was $10,729 billion, government spending was $2,594 billion, and net exports was -$568 billion, how much was investment spending?
B) In 2011 the United States economy had a GDI (Gross Domestic Income) of approximately $13,548 billion according to the Bureau of Economic Analysis. If wages were $8,340 billion, interest payments were $516 billion, and rent was $430 billion, approximately how much was remaining for profit?
Consider the following table showing the breakdown of GDP (in billions) for
China.
GDP Category Amount (in billions)
Wages and Salaries 1000
Consumption 1700
Investment 700
Depreciation 50
Government Expenditure 100
Taxes 300
Exports 50
Imports 40
Income receipts from rest
of the world
10
Income payment to rest of
the world
50
1. What are net exports for China?
2. Suppose that GDP in Japan is 1030 and then grows to 1160 (all numbers in
billions) what is the growth rate of GDP in Japan?
This question has four parts. (its not a writing assignment, just asking for a numerical value or simple answer)
1.1. What is the US GDP for the first quarter and second quarter of 2020? What is the personal consumption expenditures for the first quarter and second quarter of 2020?
Go to the website for the Bureau of Economic Analyses (BEA): https://www.bea.gov/
Section 1: Domestic Product and Income; Table 1.1.5
1.2. Use the information in Table 1 to analyze aggregate expenditures (AE) model below (Figure 1. Equilibrium in a Private Closed Economy). (table 1 and figure 1 are in the attachments)
1.3. Identify the mistake and explain why the graph of the aggregate expenditures line does not correctly illustrate the economy's equilibrium.
1.4. Create a graph for the aggregate expenditures (AE) model using the data from Table 1: A Private Closed Economy.
Tips: Remember, the 45degree line (also known as the Keynesian Cross) is a tool that shows how differences in aggregate…
Chapter 36 Solutions
Economics: Principles & Policy
Knowledge Booster
Similar questions
- Use the following table to answer the question below for an economy that has no government, no international trade or any association with other countries: Consumption (billions) Level of Output (billions) $240 $260 $280 $300 $320 $340 $360 $340 $380 $356 $400 $372 If gross investment is $4 billion, the equilibrium level of GDP (output) will be: a) $340 b) $280 Oc) $260 $244 $260 $276 $292 $308 $324 d) $360arrow_forwardQ3 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.arrow_forwardThe table below shows nominal GDP, exports, and imports for the United States. Nominal GDP, Exports, and Imports Year 2015 2016 Nominal GDP Exports Imports (billions of (billions of (billions of dollars) $2,308.0 2,334.1 LA dollars) $16,981.9 17,601.1 Instructions: Round your answers to one decimal place. If you are entering a negative number include a minus sign. a. Calculate the value of net exports in 2015. billion b. Calculate the value of net exports in 2016. billion dollars) $2,759.7 2,878.3arrow_forward
- Table 11-6 Government Real GDP Consumption Investment Purchases 1 Net Exports $1,000 $1,000 $100 $150 -$50 2 3 2,000 1,900 100 150 -50 3,000 2,800 100 150 -50 4 4,000 3,700 100 150 -50 Using the table above, answer the following question. The numbers in the table are in billions of dollars. 13) Refer to Table 11-6. What is the value of MPC? A) 0.2 B) 0.5 C) 0.75 D0.9 E) None of the abovearrow_forwardConsider the following hypothetical data for the U.S. economy in 2018 (all amounts are in trillions of dollars; see pages 179–182).Consumption 11.0 Indirect business taxes .8 Depreciation 1.3 Government spending 3.8 Imports 2.7 Gross private domestic investment 4.0 Exports 2.5e. Based on the data, what is GDP? NDP? NI?f. Suppose that in 2019, exports fall to $2.3 trillion, imports rise to $2.85 trillion, and gross private domestic investment falls to $3.25 trillion. What will GDP be in 2019, assuming that other values do not change between 2018 and 2019?arrow_forwardAccording to the figure showing 2020 GDP for selected countries, how much larger (in percentage terms) is America's GDP than: 21.43 14.34 5.08 United China Japan States b. Russia? % larger Copyright © McGraw Hill LLC. Permission required for reproduction or display. GROSS DOMESTIC PRODUCT (in U.S. $ trillion) % larger 3.86 2.87 2.83 1.70 1.27 Germany India Great Britain Russia Mexico Source: Gross Domestic Product 2020. The World Bank Group, March 2021 0.53 Sweden Instructions: Round your responses to the nearest whole number. a. Germany? 0.21 Greece 0.01 Haitiarrow_forward
- Use the following Table to answer Part (a) Assume that Bolivia has the following economic data: GDP (Y) 550 billion Taxes (T) 120 billion National Savings (S) 180 billion Private Savings 154 billion Net Exports ((NX) 49 billion (a) Calculate the following variables for Bolivia: (i) Consumption (C): [2 Points] (ii) Investment (I); [2 Points] (iii) Public Savings: [2 Points] (iv) Government Spending (G). [2 Points] Iarrow_forward2) GDP (Y) = $1,200, consumption (C) = 150, exports (X) = 50, investment (I) = 125. What is government spending (G)? (Assume M= 0) (Show your math calculation)arrow_forwardAn Economy is composed of a Producer of Apples, a Producer of Bananas, a Grocery Store, Consumers, and the Government. Producers of Apples and producers of bananas sell some of their output to the grocery store, and some directly to consumers. Producers of apples and bananas also have some loans, which they owe to consumers, and pay some interest on them. The government collects taxes and spends them on miliary personnel, which appear as wages. The following tables contain the relevant data for all of them to calculate GDP, except for consumers: Apples Producers Total Revenues Wages Interest on Loan Taxes 100 10 10 Bananas Producers Total Revenues Wages Interest on Loan Taxes 200 15 20 Grocery Store Cost of Apples Cost of Bananas Wages Taxes Revevenues 50 50 40 10 200 Government Taxes 50 |Wages 50 Calculate total profits (after taxes)arrow_forward
- Ca=25+0.75 (Y-T) lg = 50 Xn=10 G = 70 T= 30 (Advanced analysis) The accompanying equations are for a mixed open economy. The letters Y, Calg Xn, G, and T stand for GDP, consumption, gross Investment, net exports, government purchases, and net taxes, respectively. Figures are in billions of dollars. The equilibrium level of GDP for this economy isarrow_forwardAn Economy is composed of a Producer of Apples, a Producer of Bananas, a Grocery Store, Consumers, and the Government. Producers of Apples and producers of bananas sell some of their output to the grocery store, and some directly to consumers. Producers of apples and bananas also have some loans, which they owe to consumers, and pay some interest on them. The government collects taxes and spends them on miliary personnel, which appear as wages. The following tables contain the relevant data for all of them to calculate GDP, except for consumers: Apples Producers Total Revenues Wages Interest on Loan Taxes 100 10 5 10 Bananas Producers Total Revenues Wages Interest on Loan Taxes 200 15 8 20 Grocery Store Cost of Apples Cost of Bananas Wages Таxes Revevenues 50 50 40 10 200 Government Taxes 50 Wages 50 Calculate GDP in the economy (you can use any approach you want).arrow_forwardWrite the Total Spend equivalence in an open and governmental economy. (Variables will be written with their names, not abbreviations)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education