Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300 million with the proportion of an increase in income that is spent on consumption is 0.5. An induced tax of 20% is imposed by the country. The amount of investment is RM250 million, and the amount of government spending is RM150 million. (i) Calculate the national income equilibrium. (ii) Based on your answer in (i), show the aggregate expenditure graph.
Q: (а) You are given the following information. Consumption (C) = 400 + 0.8Yd Government Expenditure…
A: Equilibrium takes place where AE = Y
Q: 1. Y = C + 1 + G + (X – Z) C = Co + bY I = 1, + aY G = Go Z = Z. X = Xo In the national income model…
A: Consumption is the amount of expenditure that households spend on current goods and services. It is…
Q: (i)Calculate the national income equilibrium. (ii)Based on your answer…
A: The aggregate expenditure is the summation of total expenditure in an economy during a particular…
Q: Consumption function: C = 250 + 0.8Y Investment spending: I = 150 Government spending: G = 500…
A: Autonomous spending is independent of income. Autonomous spending = 250 + 150 + 500 + 200 - 150 =…
Q: (b) Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300…
A: GDP refers to the total value of finished goods and services that produced within the economic…
Q: Analyse the effect on equilibrium national income if the MPC falls from 0.95 to 0.4. Illustrate with…
A: National income is an income that is generated by summing the consumption, government expenditure,…
Q: In the national income model above, Y represents income, C is the consumption, G is the government…
A: The aggregate demand or expenditure is the total demand or expenditure in an economy over a period…
Q: Question. Suppose in an economy, autonomous investment (1) is $ 600 crores and the following…
A: Answer: Hence income i.e I = 600
Q: ASSUME THAT A THREE SECTOR ECONOMY IN COUNTRY W. THE AMOUNT OF AUTONOMOUS CONSUMPTION IS RM 300…
A: Aggregate demand is given by the aggregate of consumption, investment, and government expenditure.
Q: Assuming you are the Minister of Finance and Economic Planning for Nigeria, in charge of Fiscal…
A: Given information MPS=0.20 Autonomous consumption=5000 Investment=7000 G=8000 T=2000 t=0.25…
Q: Assume autonomous consumption is Gh¢ 400 million, autonomous investment is Gh¢ 300 million and…
A: i.) Equilibrium national income: Equilibrium national income can be calculated as follows: Thus,…
Q: Autonomous consumption = R100m Investment spending = R300m Government spending = R200 million…
A: please find below the answer.
Q: If the marginal propensity to save is 0.4 (or 40%) and the government plans to spend $4,000 in the…
A: Given MPS = 0.4 Increase in government spending = 4000 $ Expenditure multiplier = 1 / MPS = 2.5
Q: Suppose that the level of GDP increased by $100 billion in a private closed economy where the…
A: Answer: Let us first find the expenditure multiplier. The expenditure multiplier increases the level…
Q: Assume the following: Aggregate Expenditures (AE) = $2,500 • National Income (Y) = $1,500 •…
A: Aggregate expenditure: AE = C + I + G + X - M => AE = 150 + 0.9(Y-T) + 500 + 800 + 600 -0.10Y…
Q: Calculate the national income equilibrium of country Y using information below a)Country Y is a…
A: GDP refers to the total value of finished goods and services that produced within the economic…
Q: c. National-Income model: Closed economy i. Aggregate expenditure: AE = C +I + G Note: Exogenous…
A: Natinal income is the total factor in ome earned by the country's normal residents in an accounting…
Q: The rate of output and planned expenditures for the economy of Timbuktu are shown in the following…
A: Aggregate expenditure refers to the value of all the finished goods and services at the current…
Q: Given that: The government expenditure G = 40, the investment I = 60 the consumption C=(0.75)Ya+10,…
A: National income is equal to the sum of expenditures incurred by various sectors of the economy in…
Q: Given that G= 20 1= 35 C = 0.9Ya + 70 T= 0.2Y + 25 Where, G, I, C, T and Ya are planned government…
A: Aggregate expenditure is the sum of consumption spending, investment spending and government…
Q: In the economy of Keynesian Island, autonomous consumption expenditure is $50 million, and the…
A: It is given that the autonomous consumption in the Keynesian land is $50 million. This means that…
Q: Autonomous consumption = R100m Investment spending = R300m Government spending = R200 million…
A: Answer: Autonomous spending: autonomous spending is the spending that is independent of income…
Q: If the autonomous expenditure by the government increases by 7000 and the MPC is 0.2 find the level…
A:
Q: Assume that a three sector economy in country W the amount of autonomous consumption is RM 300…
A: National income is given by the aggregate of consumption, investment, government expenditure.
Q: If MPC =.6 and government purchases increases by $5 billion, GDP will increase by $3 billion $30…
A: Increases in the GDP depend on the Multiplier and it depend upon the MPC , so here we calculate the…
Q: Assume an economy where spending for each sector is: Household: C = 800 + 0.95Q Business: I = 3000…
A: Hey, Thank you for the question. According to our policy we can only answer up to 3 sub-parts per…
Q: Autonomous Consumption R535m Marginal propensity to consume is 0.75 Investment Spending R322m…
A: C=C0+cYd C=Consumption C0=Autonomous Consumption C=Marginal propensity to consume Yd=Disposable…
Q: Currently, the US has a total consumption of $26,300,000, saving of $10,800,000, tax revenues of…
A: Consumption = $26,300,000 Saving = $10,800,000 Tax revenues = $11,500,000 Investment = $14,800,000
Q: Spending (bilions of dollars) 800 45-degree line 700 AE 600 500 400 300 200 100 100 200 300 400 500…
A: Answer -
Q: Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300…
A: In the income-expenditure model, the equilibrium occurs at the level of GDP where aggregate…
Q: (a) Assume that Gross Domestic Product (GDP)/Total output (Y) is 6,000. Consumption (C) is given by…
A: Given; Total Output (Y)= 6000 Consumption (C)=600+0.6(Y-T) Investment (I)= 2000-100r Taxes (T)= 500…
Q: Autonomous Consumption R535m Marginal propensity to consume is 0.75 Investment Spending R322m…
A: Formula to get equilibrium output is Y = C + I + G + X + M Where, C = Consumption I = Investment G =…
Q: In a simple economy (assume there are no taxes, thus Y is disposable income), the consumption…
A: Here we can find the GDP which calculate the production of goods and services in the economy, so…
Q: (a)Elaborate THREE (3) determinants in which consumption can be increased…
A: Note: As per the guidelines we’ll answer the 1st question. Please submit a new question by…
Q: Suppose a closed economy has an aggregate consumption function given by C = 300 + 0.75Yd and…
A: National income(Y) means the total of all the commodities manufactured by the people during a…
Q: You are given the following information about the Canadian economy: Autonomous consumption…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub parts for…
Q: if investment is $0.5 trillion, government spending is $1 trillion, and next exports are -$0.5…
A: Gross domestic product (GDP): - GDP is the market value of all final goods and services produced in…
Q: Consider an economy with the following specifications. Consumption Expenditure (C) = 120 + 0.56Yd…
A: Consumption Function= 120+0.56Yd Tax Function= 40+0.25Y Transfer payment= 56 Investment function=…
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: Which one of the following statements is FALSE?(a) There are four broad groups of decision‐making…
A: Note: Since you've asked multiple question, we will solve the first question for you. If you want…
Q: India is the second populous country in the world that has indicate growth improvement over time.…
A: The macroeconomic equilibrium in the Keynesian model results when the income would be equal to the…
Q: Suppose a simple economy has no government, so that the aggregate expenditure function is: AE = C…
A: AE = C + 1 + X - 1M c = 160 + by Consumption schedule passes through (0,160) and (40, 180) Slope…
Q: In a simple economy (assume there are no taxes, thus Y is disposable income), the consumption…
A: Given C = 200 + 0.75Y Investment = 300 In closed economy, Y = C + I Y = 200 + 0.75Y + 300 0.25Y =…
Q: One of the debates surrounding changes in government spending is its effect on the size of national…
A: The aggregate demand and aggregate supply determine the macroeconomic equilbrium in an economy.…
Q: Given that: The government expenditure G= 40, the investment the consumption C=(0.75)Ya+10, the…
A: Under the expenditure approach, national income is equal to the sum of expenditure incurred by the…
Q: QUESTION 6 Refer to the table. If the full-employment real GDP is $100, the: Consumption (after…
A: The ‘inflation gap’ measures the difference between the ‘current level of real GDP’ and the…
Q: Consumption function: C = 250 + 0.8Y Investment spending: I 150 Government spending: G = 500 Exports…
A: Here we calculate the all following terms by using the given information and putting values in the…
Q: suppose you are given a consumption, investment and government expenditure functions as C= 700 +…
A: C= 700 + 0.6Y I= 360+ 0.3Y and G= 440
Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300 million with the proportion of an increase in income that is spent on consumption is 0.5. An induced tax of 20% is imposed by the country. The amount of investment is RM250 million, and the amount of government spending is RM150 million.
(i) Calculate the
(ii) Based on your answer in (i), show the aggregate expenditure graph.
Step by step
Solved in 2 steps with 2 images
- Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300 million with the proportion of an increase in income that is spent on consumption is 0.5. An induced tax of 20% is imposed by the country. The amount of investment is RM250 million, and the amount of government spending is RM150 million. Explain what would happen to the national income equilibrium if the investment changes by RM100 million.Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300 million with the proportion of an increase in income that is spent on consumption is 0.5. An induced tax of 20% is imposed by the country. The amount of investment is RM250 million, and the amount of government spending is RM150 million. Calculate the national income equilibrium.Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300 million with the proportion of an increase in income that is spent on consumption is 0.5. An induced tax of 20% is imposed by the country. The amount of investment is RM250 million, and the amount of government spending is RM150 million. (iii) Explain what would happen to the national income equilibrium if the investment changes by RM100 million.
- Assume that a three sector economy in country W the amount of autonomous consumption is RM 300 million with the proportion of increase in income that is spent on consumption is 0.5 an induced tax of 20% is amount of government spending is RM 150 million Requirements Caluclate the national income equilibriumASSUME THAT A THREE SECTOR ECONOMY IN COUNTRY W. THE AMOUNT OF AUTONOMOUS CONSUMPTION IS RM 300 MILLION WITH PROPORTION OF AN INCREASE IN INCOME THAT IS SPENT ON CONSUMPTION IS 0.5. AN INDUCED TAX OF 20% IS IMPOSED BY THE COUNTRY. THE AMOUNT OF IS RM 250 MILLION AND THE AMOUNT OF GOVERNMENT SPENDING IS RM 150 MILLION. CALCULATE THE NATIONAL EQUILIBRIUM INCOME.(a)Elaborate THREE (3) determinants in which consumption can be increased according to the consumption function. (b)Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300 million with the proportion of an increase in income that is spent on consumption is 0.5. An induced tax of 20% is imposed by the country. The amount of investment is RM250 million, and the amount of government spending is RM150 million. (i)Calculate the national income equilibrium. (ii)Based on your answer in (i), show the aggregate expenditure graph. (iii)Explain what would happen to the national income equilibrium if the investment changes by RM100 million.
- (b)Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300 million with the proportion of an increase in income that is spent on consumption is 0.5. An induced tax of 20% is imposed by the country. The amount of investment is RM250 million, and the amount of government spending is RM150 million. (i)Calculate the national income equilibrium. (ii)Based on your answer in (i), show the aggregate expenditure graph. (iii)Explain what would happen to the national income equilibrium if the investment changes by RM100 million.Assume that total expenditure E comprises the sum of government consumption, G, household consumption, C, and investment, I. Assume a closed macroeconomic system, so that income equals expenditure Y=E. If we define household saving, SH, as SH=Y-T-C, where Y is national income and T is total taxation, which of the following will be true? a. SH=I+G b. SH=I-G-T c. SH=I+(G-T) d. SH=IAssume that the consumption function for the above economy is C = 1000 + .75Yd fill in the empty cells. (All Figures are in Billions of Dollars) (3 Points) Output Taxes Disposable Income Consumption Spending Saving Investment Government Aggregate Expenditure 5000 1000 750 750 7000 1000 750 750 9000 1000 750 750
- Assume that the consumption function for the above economy is C = 1000 + .75Yd fill in the empty cells. (All Figures are in Billions of Dollars) Output Taxes Disposable Income Consumption Spending Saving Investment Government Aggregate Expenditure 5000 1000 750 750 7000 1000 750 750 9000 1000 750 750Consumption function: C = 250 + 0.8Y Investment spending: I = 150 Government spending: G = 500 Exports of goods and services: X = 200 Imports of goods and services: Z = 150 Proportional tax rate: t =25% Full employment level of income = 3575 Calculate the change in government spending required to reach full employment level of income.Calculate the national income equilibrium of country Y using information below a)Country Y is a three sector economy b) Autonomous consumption is 320million with the proportion of increase income spent on comsumption 0.6 c) Induced tax of 20% imposed by country d) Investment 200million e) government spending 100million Question 2 Based on the above answer show the aggregate expenditure graph Question 3 What happen if that was a change of investment by RM 200million