13-15 14. If government spending increases by $15, what is the13. What is the value of autonomous consumption?new equilibrium level of real GDP?15. What are the equations for the consumption, netexports, and aggregate expenditures functions? 6. Explain the effect of foreign repercussions on the valueof the spending multiplier.7. Suppose the MPC is .80, the MPI is .10, and the incometax rate is 15 percent. What is the multiplier in thiseconomy?Use the information in the following table to doexercises 8-15:YG$100$120$20$30$10$300$300$20$30-$10$500$480$20$30-$30$700$660$20$30- $508. What is the MPC?9. What is the MPI?10. What is the MPS?11. What is the multiplier?12. What is the equilibrium level of real GDP?

The concept that says that the market should expand the higher the government invests is a Keynesian…

13. What is the value of autonomous cônsumption? 14. If government spending increases by $15, what is the new equilibrium level of real GDP? 15. What are the equations for the consumption, net exports, and aggregate expenditures functions?

13. What is the value of autonomous cônsumption? 14. If government spending increases by $15, what is the new equilibrium level of real GDP? 15. What are the equations for the consumption, net exports, and aggregate expenditures functions?

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 5.10P

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Similar questions

1. Calculate GDP loss if equilibrium level of GDP is $8,000, unemployment rate 8.8%, and the MPC is 0.80. Hint: (Use Okun's law to calculate GDP loss) a) How much money should the government spend to eliminate this GDP loss? b) Calculate the tax cut needed to eliminate this GDP loss. 2. Calculate MPC, MPS and the Multiplier if consumption expenditure increases by $4,000 as a result of increase in income from $40,000 to $46,000. 3. Assume that initially G is $300 and equilibrium real GDP is $5000. If the multiplier is 5, what would be the new equilibrium level of GDP if Government expenditures increase to $500. This would be all the questions and work to these questions. There's nothing more to it.
1. Calculate GDP loss if equilibrium level of GDP is $8,000, unemployment rate 8.8%, and the MPC is 0.80. Hint: (Use Okun's law to calculate GDP loss) a) How much money should the government spend to eliminate this GDP loss? b) Calculate the tax cut needed to eliminate this GDP loss. 2. Calculate MPC, MPS and the Multiplier if consumption expenditure increases by $4,000 as a result of increase in income from $40,000 to $46,000. 3. Assume that initially G is $300 and equilibrium real GDP is $5000. If the multiplier is 5, what would be the new equilibrium level of GDP if Government expenditures increase to $500.
6. Is the relationship between changes in spending and changes in real GDP in the multiplier effect a direct (positive) relationship or is it an inverse (negative) relationship? How does the size of the multiplier relate to the size of the MPC? The MPS? What is the logic of the multiplier-MPC relationship?
If Multiplier is 1/1-MPC and MPS+MPC=1, MPC= Marginal propensity to consume and MPS= marginal propensity to save. Using this formula and MPC is 0.9 multiplier is __________ and if MPS =0.4 multiplier is ________________ a 10 and 10 b 1 and 2.5 c 10 and 2.5 d 1.111 and 1.666
4. A country’s consumer spending is defined by the following equation:Consumer spending = 365 + 0.75 (Disposable Income)a. Draw a diagram to represent this equation. b. Assuming no government, what will the Marginal Propensity to Save (MPS) in this country.c. What will be Consumer spending if disposable income in this country is 1000? d. If suddenly this country’s wealth increases, how do you think the equation might change.Also show it in a diagram.
9)Calculate how much output would expand by if the government increased spending by $500 billion and financed this spending by increasing lump-sum taxes by the same amount.
5. The multiplier effect of a change in government purchases
2. Given:C = 250 + 0.8 Y I = 150G = 300TR = 100NX = 100 t =0.25i)Find the equilibrium level of income.(ii)Suppose, b10, G falls to 100 and NX falls to 10. How much TR should the government increase to have the same level of equilibrium income as in part i)?(iii)In determining the required change in TR in part ii), which multiplier did you use and why? (Hint: keep in mind the consumption tendency households may have under the COVID 19 situation in selecting the multiplier).(iv)Draw a graph to show the appropriate changes between part i) and part ii).(v)Give an example related to current Bangladeshi situation where the government may follow a 'Transfer Promoting Policy' instead of a 'Growth Promoting Policy' in determining who gets the transfer payment.(vi)Instead of paying transfer (TR) if the government were to increase government spending (G), what type of crowding out would you expect? Briefly explain.(vii) As we have observed recently that, a lot of the assistance from the…
Given: C = 250 + 0.8 Y I = 150G = 300TR = 100NX = 100t =0.25i) Find the equilibrium level of income.ii) Suppose, because of the current COVID 19 situation Ꞓ falls to 50, MPS falls to .05, I falls to 10, G falls to 100 and NX falls to 10. How much TR should the government increase to have the same level of equilibrium income as in part i)?iii) In determining the required change in TR in part ii), which multiplier did you use and why? (Hint: keep in mind the consumption tendency households may have under the COVID 19 situation in selecting the multiplier).iv) Draw a graph to show the appropriate changes between part i) and part ii).v) Give an example related to current Bangladeshi situation where the government may follow a 'Transfer Promoting Policy' instead of a 'Growth Promoting Policy' in determining who gets the transfer payment.vi) Instead of paying transfer (TR) if the government were to increase government spending (G), what type of crowding out would you expect? Briefly…
Assume that the economy is now governed by a government and begins trading with other economies. The economy is described by the following set of equations. ?=1000+0.5⋅?d ID = 600 G=700 T=400 EX=0.1⋅Y IM=100+0.1⋅Y YD = Y - T Calculate the equilibrium level of output Y* a) 2857 b) 4000 c) 6274 d) 4400 Whats the government expenditure multiplier? Whats the tax multiplier? Whats the ba;anced budget multiplier?
Give typing answer with explanation and conclusion The following information for an economy is given. MD: i=0.12-0.00015QM Investment demand: i=0.12-0.0003IP C= 250+0.75(Y-T) Multiplier =1/(1-MPC) T=0, G=200, MS=200 r=0.10 (required reserve ratio) The MPC (marginal propensity to consume) is ____ blank _, which means the__ blank _ A. 0.25 B. 0.75 C. amount (fraction)save out of each additional dollar of income. D. amount (fraction) spent out of each additional dollar of income.
Only typed answer Explain why the multiplier falls when taxes depend on income. .1 Assume the following for the economy of a country: a. Consumption function: C = 60 + 0.75Yd b. Investment: I = 75 c. Government spending: G = 45 d. Net taxes: T = - 25 + 0.2Y e. Disposable income: Yd. = Y - T f. Equilibrium: Y = C + I + G Solve for equilibrium income. How much does the government collect in net taxes when the economy is in equilibrium? What is the government’s budget deficit or surplus?