4. (a) If an initial increase in investment of $3 billion results in a $4.5 billion increase in equilibrium real output, what is the size of the spending multiplier? (b) Calculate the MPW for this example.
Q: 1. Compute the MPS and the MPC
A: Note: In the BNED Guidance, only the first question can be answered at a time. Resend the question…
Q: 4. Suppose the economy is in a recessionary gap of $5,000 and the output multiplier is 4. By how…
A: Given: The economy is in a recessionary gap of = $5000 The output multiplier is = 4 To Find: The…
Q: Find the impact of these changes on National Income. Explain the leakages of multiplier
A: The amount of output generated in the economy in a period is said to be national income. It also…
Q: 1. Briefly define the following terms and explain the relationship between them: MPC .... .…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: Exhibit 10-3 Disposable Income Yd Consumption C $2,000 $2,040 2,100 2,120 2,200 2,200 2,300…
A: The multiplier is a measure of the amount by which the equilibrium level of income changes due to a…
Q: 3. Suppose the MPC is 0.8. The government wants to decrease Total Spending by $600. How should it…
A: GIVEN MPC = 0.8 decrease in Total spending = $600 (ie. ΔAD) Change in G to achieve (ΔAD=$600)…
Q: 10. Suppose the consumption function is represented by the equation: C = 500 + 0.6Y Simple…
A: MPC = coefficient of Y = 0.6 Multiplier = 1 / (1 - MPC) = 1 / (1 - 0.6) = 1/0.4 = 2.5
Q: 1. The multiplier effect of a change in government purchases Consider a hypothetical closed economy…
A: (i) Given that the households consume $0.70 of every increase in income by a dollar, the marginal…
Q: 13 of 25 Given the following information of a closed economy Saving = -50 + 0.25 Yd. Investment =…
A: This will be explained below:
Q: 4. The country of Merryville has an unemployment rate that is greater than the natural rate of…
A: Multiplier shows the proportion of change in a variable due to change in related variables. The…
Q: QUESTION 4 Suppose the real GDP in a fictional economy currently equals to 160 million USD, the…
A: According to the above mentioned question we have:- Equilibrium level of GDP = 160 million Potential…
Q: Table 2 shows elements in the national income accounts of an economy. Assume the economy is…
A: C) The marginal propensity to consume: MPC=change in consumptionchange in income Change in…
Q: If the MPC were equal to zero, the expenditure multiplier would be * a. Less than zero b. zero c.…
A: Marginal propensity to consume (MPC) measures the change in consumption due to change in disposable…
Q: 16. Calculate autonomous consumption expenditure from the following data about an economy which is…
A: Autonomous consumption is a consumption which is occurs even at zero income level so here we find…
Q: 4. Suppose the economy is in a recessionary gap of $5,000 and the output multiplier is 4. By how…
A: GIVEN Suppose the economy is in a recessionary gap of $5,000 and the output multiplier is 4
Q: Is the relationship between changes in spending and changes in real GDP in the multiplier effect a…
A: The multiplier impact alludes to any adjustments in shopper spending that outcome…
Q: 4. (a) If an initial increase in investment of $3 billion results in a $4.5 billion increase in…
A: The data presented in the question above is:- Increase in Investment = $3 billion Increase in…
Q: Question 2 Refer to the data in Table 1, the consumption function is C = 200+ 0.8 (Y-T). Fill in the…
A: "Macro-economic equilibrium output is attained at a point where income equates the planned aggregate…
Q: 2. Suppose the consumption function of country A is C-1000+ 0.8Y, ( is the disposable income).…
A: Equilibrium condition: Y= C+I+G
Q: 3. The Nottinghamshire Research Observatory in England calculated that students who attend…
A: In economics the multiplier effect refers to the proportional amount of increase, or decrease, in…
Q: 3. Complete the following chart to calculate the spending and tax multipliers. Spending Тах MPC MPS…
A: In the mentioned chart we have to calculate the MPS, MPC, and data among them anyone is given. Also,…
Q: 22. Suppose economists observe that an increase in government spending of $10 billion raises the…
A: Solution - Given - Government spending =$10 billion Demand for Goods and service = $50 billion We…
Q: 10. The higher the marginal propensity to import, the is the spending multiplier, and the is the…
A: a. smaller; smaller
Q: 3. A fall in the income tax rate will O lower the multiplier and lower equilibrium income. O raise…
A: Macroeconomics is a part of economics that deals with production, decision and allocation concerning…
Q: 15. What are the equations for the consumption, net exports, and aggregate expenditures functions?
A: Aggregate expenditure refers to the current value of all the finished goods and services in the…
Q: Table 2 shows elements in the national income accounts of an economy. Assume the economy is…
A: As per the guidelines answer is given to the first three subparts. 1. "Equilibrium level of income…
Q: 1. Use the following table with information on the consumption behavior of the people of Gotham to…
A: The consumption function (C) , which is the mix of autonomous and non-autonomous consumption,…
Q: 13. 14. If government spending increases by $15, what is the new equilibrium level of real GDP? What…
A: Aggregate expenditure refers to the current value of all the finished goods and services in the…
Q: 2. Suppose the MPC = 0.6? What will be the government spending multiplier? If, in this economy,…
A: Here, it is given that the marginal propensity to consume of an economy is 0.67, which implies that…
Q: 1. If the consumption function in an economy as follows C = 50 + 0.75Y and the following variables…
A: 1) Given Consumption (C) = 50 + 0.75Y Investment(I) = 250 MD Government expenditure(G) = 200MJD,…
Q: 5. If the multiplier is 5 and investment increases by $3 billion, equilibrium real GDP will increase…
A: Hi! thankyou for the question but as per the guidelines, we answer one question at one time. Kindly…
Q: 5. If an economy has a recessionary expenditure gap, the government could attempt to bring the taxes…
A: Recessionary gap is the gap where economy real GDP is less than Full employment GDP , Government…
Q: 3. When the following event occurs, the change in Real GDP = Event: The government increases its…
A: here we calculate the change in Real GDP due to change in government expenditure increases so ,…
Q: 1. Multiplier = 2. Equilibrium Income = 3. Saving at equilibrium = %3D %3D
A: C=400+0.8Yd Ip=200 G=400 X=400 T=50+0.2Y M=50
Q: 5) Suppose the Canadian economy is represented by the following: C=100+0.8Yd T-$50 I-20+0.1Y G-200…
A: The formula for equilibrium output: Y = C + I + G Given, C = 100 + 0.8Yd Yd = Y - T and T = $50 I =…
Q: How does the increase in total expenditures affect the equilibrium income level?
A: In a country a government plays an important role in the development and growth of that nation.…
Q: 3. For the following problem, assume that the MPC, b, takes into account how much consumers spend as…
A: The aggregate demand is the total demand of all the goods and services. The aggregate demand is the…
Q: Figure 3 45° line 20 16 12 1.2 12 16 20 24 Disposable income (trillions of 2005 dollars) Refer to…
A: This Graph shows a consumption line that reflects a plot of the numbers in the consumption schedule…
Q: 3. For a closed economy, the following data is given: 50 + 0.8Y, Consumption C %3D Investment I 70…
A:
Q: Assume a closed economy in which disposable income starts at 1,000 and increases by 500; consumption…
A: GDP is the value of final goods and services produced in the economy within a given period of time.
Q: 13. What is the value of autonomous cônsumption? 14. If government spending increases by $15, what…
A: The concept that says that the market should expand the higher the government invests is a Keynesian…
Q: 1. The positive relationship between consumption expenditure and disposable income can be shown by a…
A: When analyzing the relationship between consumption and disposable income, it can be said that…
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- 3@ An economy has neither imports nor income taxes. The MPC is 0.75 and the real GDP is $120 billion. The government increases expenditures by $4 billion. The multiplier is _____ and the change in real GDP from the increase in government expenditures is _____ billion.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?5. The multiplier effect of a change in government purchases
- Table 2 shows elements in the national income accounts of an economy. Assume the economy is currently in equilibrium. elements billions Consumption (total) 80 Investment 9 Government Expenditure. 6 Imports 15 Exports 8 C) If national income now rises by £22 billion and as a result, the consumption of domestically produced goods rises to £80 billion. Calculate the marginal propensity to consume (MPC). D) What is the value of the multiplier? E) Comment on the results in part (c) and (d).Question 3: At a level of National Income of AED 30,000 Million, the government announced an increase in expenditures from AED 1000 Million to AED 1500 Million as a stimulus package for infrastructure development and at the same time government also announced an increase in tax from AED 1000 Million to AED 1600 Million. The marginal propensity to consume (MPC) for the country is 0.75. Find the impact of these changes on National Income. Explain the leakages of multiplierPlease no written by hand solution 1. Explain the basic idea of the expenditure multiplier and also discuss the role consumer's play in determining its magnitude. (Minimum 150 words)
- 1. If the consumption function in an economy as follows C = 50 + 0.75Y and the following variables fixed at investment = 250 MD Government expenditure = 200MJD, Net exports = 200MJD, so the equilibrium income is equal3. 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 $600.1) Determine the value of the multiplier for this economy, and find the equilibrium value of Y.
- 19 - How does the increase in total expenditures affect the equilibrium income level?A) remains constantB) IncreasesC) first increase and then decreaseD) DecreasesE) Decrease first, then increase.Macroeconomics Question No.2 Suppose the consumption function is given by C = 100 + 0.8YD and that I = 50, while G=200, TR=62.5 and t=0.25. What is the equilibrium level of income? What is the level of saving in equilibrium? If investment were to rise to 150, what would be the effect be on equilibrium income. What is the value of multiplier in part a. and c. Draw a diagram indicating the equilibrium in part a. and c.1. Compute the MPS and the MPC 2. Consider the consumption equation C=a=b.Y. Compute a and b