Macroeconomics and Equilibrium Level

The sequential headlines of chapter nine were “The Determination of Equilibrium Output (Income)” and “The Savings/Investment Approach to Equilibrium.” The equilibrium output equation as listed by Case, Fair, and Oster was that of Y = C + I + G and the “savings/investment approach to equilibrium” was S + T = I + G. The second heading defined S and T as “leakages” and I and G as “injections” (p. 170). Once these two equilibrium approaches were listed on page 170, the government spending multiplier was defined by Case, Fair, and Oster as this: “the ratio of the change in the equilibrium level of output to a change in government spending” (p. 171). This term was also

15. In pure competition, each extra unit of output that a firm sells will yield a marginal revenue that is ( )

a. What amount of ordinary income and separately stated items are allocated to them for years 1 and 2 based on the information above?

iv. Fly Cheap Airlines purchases 200 million gallons of fuel. This will not affect any component since expenditure of fuel is an intermediate payment and is not part of GDP.

20. Which of the following statements is TRUE? Economists normally assume that the goal of the

Determine the utility-maximizing combination of x and y if his income decreases by $60. What is his marginal utility of money equal to at this lower income level?

c. What is your determination regarding reducing the taxable amount of income for both (a) and (b) above?

Scenario 3: The nation is currently experiencing a period of rising prices. Inflation is making consumer goods increasingly difficult to afford as wages have remained constant.

33. Which of the following is not a problem associated with GDP as a measure of social

Spending and Revenue are divided into ten categories, such as Investments, General Government, etc. Choose three spending categories and one revenue category to write about. What decisions to spend or cut did you make in each of the categories that you chose? Explain your choices. Be sure to read the pro/con arguments for each decision. Which arguments did you find most convincing?

A). Mr. Masi replies that the tax rate has stayed the same at 17 cents. We are still the lowest in the state. The tax rate has stayed constant but the revenue has increased dramatically. It is because of the tax increased revenue for us being twenty million dollars positive. The growth helped with this increase. Half of our operating revenue comes from the tax payers, then twenty-two percent from Medicaid, ten percent from Medicare, seven point eight percent from commercial insurance. Add all that up sixty percent uncompensated + twenty-two percent Medicaid +ten percent Medicare+ seven point eight percent commercial to equal hundred percent of our

Suppose the marginal utility of the last unit of X consumed is 40, and the marginal utility of the last unit consumed of Y is 30. The prices of X and Y are $4 and $2, respectively. Should the consumer increase or decrease consumption of X? Explain carefully

11. Draw the consumption possibilities curve for each country on the same graph you drew for question 9.

Estimate the effect on income each of the options Rowe has suggested if Bradley estimates as follows :

Construct a table similar to Table 17.2 (on page 477), only this time assume that the mpcd is ¾. Show that national income will increase by £640 million.