Assuming the level of investments is $16 billion and independent of the level of total output,complete the following table and determine the equilibrium levels of output and employment in this private closed economy. What are the sizes of the MPC and MPS? Possible Levels of Employment, Million Real Domestic Output (GDP=DI), Billions Consumption, Billions Saving, Billions 40 $240 $244 $ 45 $260 $260 50 $280 $276 55 $300 $292 60 $320 $308 65 $340 $324 70 $360 $340 75 $380 $356 80 $400 $372

Assuming the level of investments is $16 billion and independent of the level of total output,complete the following table and determine the equilibrium levels of output and employment in this private closed economy. What are the sizes of the MPC and MPS? Possible Levels of Employment, Million Real Domestic Output (GDP=DI), Billions Consumption, Billions Saving, Billions 40 $240 $244 $ 45 $260 $260 50 $280 $276 55 $300 $292 60 $320 $308 65 $340 $324 70 $360 $340 75 $380 $356 80 $400 $372

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter19: The Keynesian Model In Action

Section: Chapter Questions

Problem 1SQP

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Assuming the level of investment is $16 billion and independent of the level of total output, complete the accompanying table and determine the equilibrium levels of output and employment in this private closed economy. What are the sizes of the MPC and MPS?
Suppose a closed economy has an aggregate consumption function given by C = 100 + 0.75Yd and generates $3000 output and income in equilibrium. Suppose also that the government spends 300 and imposes a lump-sum tax of 50. What is the level of intended investment? (round your answer to the nearest whole value)
Suppose a closed economy has an aggregate consumption function given by C = 300 + 0.75Yd and generates $2200 output and income in equilibrium. Suppose also that the government collects a lump-sum tax of 300. How much will the private sector be saving total in equilibrium? (round your answer to the nearest whole value)
Suppose a closed economy with no government spending or taxing is capable of producing an output of $3,000 at full employment. Suppose also that autonomous consumption is $400, intended investment is $200, and on average households will save 25 cents of every additional dollar of income they receive. Calculate the following (express your answers as whole numbers without decimals, commas, dollar signs, or anything else). I found Value of output (Y) in equilibrium: ___2400___ Total consumption in equilibrium: ___2200___ I'm trying to find the multiplier. Could you show me a step by step on how you would figure the multiplier out?
Q8. For the data in the following table, the consumption function is C = 800 + 0.6(Y – T). Fill in the columns in the table and identify the equilibrium output. Output Net Taxes Disposable Income Consumption Saving Planned Investment Government Expenditure Planned AE Unplanned Inventory change 2100 100 300 400 2600 3100 3600 4100 4600 5100
A simple closed economy with government sector is given by the following equations: C = 10 + 0.75 Y I = 20 G = 40 where C is aggregate consumption, Y is national income, G is government expenditure on goods and services, and I is investment expenditure. Note that there are no taxes assumed in parts (a) to (c). (a) What is the equilibrium level of national income? Show all your workings. (b) What is the value of aggregate consumption and the value of aggregate savings at the equilibrium level of the national income? Show all your workings. (c) What would be the new level of national income if government expenditure increased by 10? Show all your workings and explain the mechanisms through which the economy reaches a new equilibrium. (d) If a tax rate of 1/3 of national income were introduced, what would be the new equilibrium level of national income in the economy outlined above. Show all your workings and explain the mechanisms through which the economy reaches the new equilibrium.
Answer all four questions based on the following diagram. 1. Calculate the MPC in the above diagram. 2. Based on Diagram 1, If private Investment of $100 is added to the existing C, calculate the new equilibrium level of NI. 3. Given your answer to the previous question (question #2) calculate by how much G should change, if the full employment level in the economy is at $3000. 4. Based on the answer to the previous question (question #3), if half of those government expenditures are financed through lump sum taxes, calculate the new level if NI? (C+I+G)
The following table shows consumption (C), investment spending (I), and government purchases (G), for some hypothetical economy at several levels of income (reported in billions of dollars of real GDP). Assume that in this economy, income is taxed at a rate of 25%, base consumption is $25 billion, and that the marginal propensity to consume (MPC) is 0.333, or 1/3. Further assume that this economy is closed, that is, there is no international trade and so net exports are always equal to zero. Use the given information to fill in disposable income, consumption, and planned expenditures in the following table. Income: Real GDP Disposable (After Tax) Income C Ip G Planned Expenditures (Billions of dollars) (Billions of dollars) (Billions of dollars) (Billions of dollars) (Billions of dollars) (Billions of dollars) 0 0 25 150 50 100 150 50 200 150 50 300 150 50 400 150 50 500 150 50…
Suppose a closed economy has an intended investment of 100 and an aggregate consumption function given by C = 250 + 0.75Yd. Suppose also that the government spends 150 but collects no taxes. What is equilibrium output and income?
Suppose a closed economy has an intended investment of 200 and an aggregate consumption function given by C = 250 + 0.75Yd. Suppose also that the government spends 200 but collects no taxes. What is equilibrium output and income? (round your answer to the nearest whole value)
Assume the current equilibrium level of income is $200 billion as compared to the full-employment income level of $240 billion and that consumption is the only component of aggregate expenditures that depends upon the level of GDP. If the MPC is 5/8, what change in aggregate expenditures is needed to achieve full employment?
Suppose a closed economy has an aggregate consumption function given by C = 50 + 0.50Yd and generates $2500 output and income in equilibrium. Suppose also that the government spends 400 and imposes a lump-sum tax of 100. What is the level of intended investment?

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Possible Levels of Employment, Million	Real Domestic Output (GDP=DI), Billions	Consumption, Billions	Saving, Billions
40	$240	$244	$
45	$260	$260
50	$280	$276
55	$300	$292
60	$320	$308
65	$340	$324
70	$360	$340
75	$380	$356
80	$400	$372