arginal Propensity to Consume: 0.4, Investment: 10000, Government Spending: 30000 et Exports: 5000, Income Tax rate: 25%. The government wishes to conduct an injection to the economy to achieve a 45000 increase in national income. a) Calculated the current equilibrium income in the economy b) The government increases spending by 30000. Does this achieve the desired increase of 45000? c) How much should the government increase its spending to achieve the 4500C increase in national income (to the nearest whole number)? (Hint: consider the what the multiplier in this economy is)

arginal Propensity to Consume: 0.4, Investment: 10000, Government Spending: 30000 et Exports: 5000, Income Tax rate: 25%. The government wishes to conduct an injection to the economy to achieve a 45000 increase in national income. a) Calculated the current equilibrium income in the economy b) The government increases spending by 30000. Does this achieve the desired increase of 45000? c) How much should the government increase its spending to achieve the 4500C increase in national income (to the nearest whole number)? (Hint: consider the what the multiplier in this economy is)

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section: Chapter Questions

Problem 6TY

See similar textbooks

Similar questions

Explain how to derive a total expenditures (TE) curve.
The current state in the economy are as follows; Autonomous Consumption: 9000, Marginal Propensity to Consume: 0.4, Investment: 10000, Government Spending: 30000, Net Exports: 5000, Income Tax rate: 25%. The government wishes to conduct an injection into the economy to achieve a 45000 increase in national income. Calculated the current equilibrium income in the economy The government increases spending by 30000. Does this achieve the desired increase of 45000? How much should the government increase its spending to achieve the 45000 increase in national income (to the nearest whole number)? (Hint: consider the what the multiplier in this economy is)
Find autonomous Expenditure from the following:- Autonomous consumption = $200 Marginal propensity to consume = 0.6 National income = $3000
A country’s GDP is defined by the following equation: GDP = Consumer Spending + Investmentspending. The economy of this country is closed and there’s no government. Investment spendingis defined by the following equation: Investment Spending = Investment (planned) + Investment(unplanned). Investment (planned) is fixed at 350. Consumer spending is defined by thefollowing equation: Consumer spending = 200 + 0.55 (GDP). And for this country, PlannedExpenditure = Consumer Spending + Investment Planned. Based on this information, attempt thefollowing questions:a. “Investment (unplanned) will be negative if GDP is 900” – showing work, test theauthenticity of this statement. b. How do you think GDP (and production) will change if the income of this country is 1500?Explain by deriving Investment (unplanned) for an income of 1500. c. Derive the GDP for which Planned Expenditure = GDP. d. Supposed Investment (planned) was increased to 450. How will income-expenditureequilibrium change. e. Relate…
Question:Given that the marginal propensity to consume in a fully employed closed economy is 0.75, an increase in government expenditure of $1,000 million will increase the national income by:a. $0b. $750c. $4,000d. $7,500e. $8,000
Below are the information of four sector economy. All values are in RM billon. The saving function [Fungsi tabungan] : S = -200 + 0.15 Yd Investment, [Pelaburan] : I = 500 Government spending [Perbelanjaan kerajaan] : G = 300 Tax [Cukai] : T =100 Export (X) : X=200 Import (M) : M=100 Based on the data above, calculate the: a. Find value of MPC. b. Derive the consumption function for the above economy c. Calculate the equilibrium level of national income using the AD-AS approach.
Question 17 – Question 20: In this question, interest rate and prices are held fixed, and the economy can be described by the income-expenditure model. Consumption: C = 190 + 0.8YD; where YD = disposable income Investment: I = 180 – 50i, where i = 0.1 (10% & it is held fixed) Government spending: G = 183 Taxes: T = 272 Transfers: TR = 57 Exports: X = 18 Imports: IM = 24 Question 17 If the current level of output is 1975, find the levels of national savings and unplanned investment. Be sure to show your work rounded your answer to 2 decimal places if necessary
Assume a closed economy in which, there is no government. If ouput (income) is 800,autonomous consumption is 100, and marginal propensity to consume is 0.70 in this economy.Then calculate the the amount of consumption spending?