Questions attached below Aggregate Expenditures and Tax Cut MultiplierSuppose the system of aggregate expenditures can be described by the following relationships andparameter values.C(Y – T) = 1200 + 0.8(Y – T)I(r) = 100 – 3rG = 200 ;T = 200;r = 5; Ex = Im = 01. Suppose Y1 = 4000, find the level of aggregate expenditures.2. At Y, = 4000, are inventories building or being drawn down? How do you know?3. Illustrate the outcome at Y, on a Keynesian Cross model in the space below.4. Solve for the macroeconomic equilibrium value of Y*. Note that you'll need this answer againlater in this assignment.5. Suppose there is a 100 decrease in the level of taxes. Specifically, let T' = T + AT =200 – 100 = 100. Find the new macroeconomic equilibrium value of Y**.6. Find AY = Y** – Y*7. Find the value of the government spending multiplier, or Hint: the change in Y was youranswer to number 6 and the change in tax was given to you as -100.

Given Information: C (Y - T) = 1200 + 0.8 (Y - T) I (r) = 100 - 3r G = 200 T = 200 r = 5 Ex = Im = 0

Aggregate Expenditures and Tax Cut Multiplier Suppose the system of aggregate expenditures can be described by the following relationships and parameter values. C(Y – T) = 1200 + 0.8(Y – T) I(r) = 100 – 3r G = 200;T = 200;r = 5; Ex = Im = 0 1. Suppose Y, = 4000, find the level of aggregate expenditures. %3D 2. At Y; = 4000, are inventories building or being drawn down? How do you know? 3. Illustrate the outcome at Y; on a Keynesian Cross model in the space below.

Aggregate Expenditures and Tax Cut Multiplier Suppose the system of aggregate expenditures can be described by the following relationships and parameter values. C(Y – T) = 1200 + 0.8(Y – T) I(r) = 100 – 3r G = 200;T = 200;r = 5; Ex = Im = 0 1. Suppose Y, = 4000, find the level of aggregate expenditures. %3D 2. At Y; = 4000, are inventories building or being drawn down? How do you know? 3. Illustrate the outcome at Y; on a Keynesian Cross model in the space below.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.A: The Simple Algebra Of Income Determination And The Multiplier

Problem 4TY

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