B CF 3 1 2 Disposable income (trillions of 2005 dollars) In the above figure, at a disposable income level of $2 trillion, saving equals Select one: O a. $4 trillion. O b. zero. O c. consumption expenditures. O d. disposable income. Consumption expenditure (trillions of 2005 dollars) 2) 5.
Q: G IM AE 200 200 200 s00 400 100 500 600 -100 200 500 400 150 Refer to the data above to answer this…
A: here we calculate the value of the Multiplier and choose the correct option so the calculation of…
Q: In the figure, equilibrium expenditure is equal to Aggregate planned expenditure (trillions of 2012…
A: In an economy, the equilibrium expenditure is calculated in different ways. The given graph shows…
Q: $620 Personal Consumption Expenditures Saving 50 200 Government Purchases 750 Net Domestic Product…
A: Given information:-
Q: Suppose that the economy of the United States has an investment schedule that is reflected in the…
A: There is an inverse relationship between planned real investment and the annual rate of interest.…
Q: Consumption spending is $3.71 trillion, spending on nondurable goods is $1.215 trillion, and…
A: Durable goods are those consumer goods which do not wear out quickly and last a long time.…
Q: Suppose disposable income increases from $7 trillion to $8 trillion. At the same time, consumption…
A: Disposable income: It is that portion of an individual’s overall income over which the recipient of…
Q: The consumption schedule relates: O consumption to saving. O disposable income to domestic income. O…
A: Consumption schedule is a table that shows the relationship between Y(Income) and Consumption…
Q: A country reports that unplanned inventories increased during 2019. The increase in unplanned…
A: In an economy, inventory refers to the amount of output produced in a specific year and stocked at a…
Q: Which of the following is not one of the three main categories of consumer expenditures? O A.…
A: 1) Residential investment is not one of the three main categories of consumer expenditures. 2) The…
Q: Which of the following does NOT affect potential GDP? O A. the quantity of capital and human capital…
A: Here, option E is correct. Becuase potential GDP is defined as the maximum output which can be…
Q: Refer to the information provided in Table 21.10 below to answer the question that follow. Table…
A: Nominal GDP is the GDP measured in the current year prices. Year 3: Q1=60 P1=$1.20 Q2=140 P2=$1…
Q: Refer to problem 2. What is the unplanned inventory change when GDP is equal to $2300? * O $40 -$40…
A: When the planned aggregate expenditure is equal to the real GDP will yield equilibrium in the…
Q: 1. Given the following macroeconomic data of a hypothetic economy: = 175 + 0.75(DI) = 50 = 35 = 30 1…
A: GDP=Y=C+I+G+ (X-M) D=Y-T Therefore, DIC+I+G+ (X-M) - T DI = 175 + 0.75(DI) + 50+ 35+ (30-45) - 35 DI…
Q: The table gives real GDP (Y) and its components in billions of dollars. If real GDP is $100 billion,…
A: If real GDP is $100 billion, aggregate planned expenditure is more than real GDP. Option b is…
Q: 17. Consider the following macroeconomic mode Time C= 200 + 0.8Y GI (Gross Investment)= 200 GP…
A: In an economy, the macroeconomic equilibrium is established at a level of real GDP where the…
Q: What is the effect of an increase in investment? When investment increases, O A. aggregate demand…
A: Investment is the part of aggregate demand.
Q: Consider a 4-sector economy. In this economy, consumption spending, taxes and imports are the…
A: here we calculate the slope of Planned Aggregate expenditure line by using the given information so…
Q: What are the two equivalent formulas for investment multiplier? O A. 1 and MPC 1- MPS OB. 1- MPC MPC…
A: We know that aggregate output in closed economy is given by Y = C+I+GWhere C =c+MPC×YSo Y=…
Q: A farmer sells $150,000 of apples to individuals who take them home to eat and $75,000 of apples to…
A: A farmer is selling the apples to two individuals one is final consumer and one is the producer.
Q: Refer to problem 2. The equilibrium level of real GDP is * O $2,500 O $2,400 O $2,300 O $2,200
A: The real GDP is said to be at equilibrium when the total amount of output produced in an economy is…
Q: Consider the following Macro model: GDP Y=C+Gl+GP+NX C=120 +0.80Y, G.I-80 G.P=60 Tax 100 NX= -20 Yd…
A: GDP refers to the total value of finished goods and services that produced within the economic…
Q: Question 4 Assume the economy's consumption and saving schedules simuitaneously shift downward. This…
A: Consumption refers to the use of commodities and services by the consumers. Savings is the amount of…
Q: Suppose that income increases by 17 units and the marginal propensity to save is 1/4 (i.e. 0.25).…
A: here we calculate the change in consumption by using the consumption function so the calculation of…
Q: QUESTION 4 If an increase of $5 billion in investment is associated with an increase of $50 billion…
A: Multiplier: It is defined as the number of times by which the income increases due to an increase in…
Q: Consider the following Macro model: GDP=Y=C+GI+GP+NX C=120+0.80Y. G.I=80 G.P=60 Tax=100 NX= -20 Yd =…
A: Multiplier in economics is the factor by which the economic variables get multiplied due to a change…
Q: QUESTION 1 Below is the data for an economy in the year 2016. Gross Domestic Product = $25,000…
A: Aggregate expenditure is the sum of consumption, investment, government spending and net exports.
Q: LAST WORD What is Say's law? How does it relate to the view held by classical economists that the…
A: Answer: Given that: LAST WORD What is Say's law? How does it relate to the view held by classical…
Q: 4. Consumption Function How would an increase in each of the following affect the consumption…
A: I would like to inform you that we can only do one question (up-to 3 sub-parts) in one session,…
Q: lumber mill in BC, Canada cut Canadian trees into ear, but ended in inventory only to be sold this…
A: Below points are to be considered: *Trees were cut in last year. *Sold for $322715 in the current…
Q: A country has a GDP of $250 billion dollars. The consumption in that country is $30 billion. There…
A: Note: You have uploaded two questions simultaneously. Hence, we shall solve the first question for…
Q: An economy saves 20 percent of any increase in income and there are no income taxes or imports.…
A: It is given that; Marginal propensity to save (MPS) = 0.2 the increase in investment= $2 billion
Q: Disposable income Lütfen birini seçin: O A. decreases when income decreases O B. is always fixed. O…
A: Taxes are unintended fees placed on individuals or companies and levied by a government agency –…
Q: Assume an economy with a coal producer and a steel producer. In a giver ons of coal, selling for $5…
A: Given that The coal producer pays $50 million wages and steel producer pays $40 million wages,…
Q: If real GDP is $2200 billion, the GDP deflator is 110, nominal net exports are $100 billion, nominal…
A: Gross domestic product(GDP) measures the money value of all final goods and services produced in an…
Q: d. What are the levels of saving and actual investment? Saving = $ ]billion Investment = $ ] billion…
A:
Q: 63. Fatima's disposable income increases by $1000, and she spends $600 of it. Fatima's a. MPS is 0.6…
A: The marginal propensity to save is the portion of each extra dollar of income of a household which…
Q: What is the expenditure approach to measuring GDP? The expenditure approach to measuring GDP sums…
A: An expenditure approach is an approach that sums all the spending activities of the economy. These…
Q: Suppose GDP last year in a closed economy was $3,000, taxes were $200, government spending was $500,…
A: Macroeconomics analyzes the economy as a whole. It studies aggregate economic concepts such as…
Q: Assume the GDP for Lindellland is $500 billion. If investment spending is $100 billion, government…
A: Gross domestic product is the market value of all goods and services produced in the economy in a…
Q: A company produced 8 dishwasher machines in 2015. The company sold 6 to households in 2015 and added…
A: To find the company output in the given question.
Q: All Numbers are in $ Billion Output Consumption (Income) Spending 400 700 Net Investment Government…
A: Aggregate expenditure is calculated using the formula C+I+G+(X-M) C is consumption I is investment G…
Q: Statement A: As disposable income goes up, the APC falls but APS increases. Statement B: As…
A: Average propensity to consume(APC) indicates the part of income that is kept for consumption…
Q: Ceteris paribus, which of the scenarios below will unambiguously lead to an increase in real GDP? O…
A: GDP: It is the total of all values added to the economy.
Q: 50. As disposable income increases, O a. consumption and saving both decrease O b. consumption…
A: 50) Disposable income is the sum of consumption and savings.
Q: A $1.5 trillion increase in investment (a component of autonomous expenditure) leads equilibrium…
A: An increase in autonomous expenditure by $1.5 trillion leads to an increase in equilibrium…
Q: The total expenditure in Macroland begins with these initial levels (in trillions of dollars): GDP =…
A: Consumption function: C = Ca + MPC (Y-T) Where C is consumption Ca is autonomous consumption MPC is…
Q: na small economy, consumption spending is $7,500, government purchases are $2,200, gross investment…
A: GDP is the total market value of goods produced domestically during an accounting year. The given…
Q: 12 63. Fatima's disposable income increases by $1000, and she spends $600 of it. Fatima's a. MPS is…
A: Formula for MPC=change in consumption/change in income =600/1000=0.6 MPC+MPS=1 Therefore MPS=1-MPC…
Q: 200 700 580 Refer to problem 1. Suppose that potential GDP is $740O, by how much investment should…
A: Given C = 600 + 0.8Yd I = 800 G = 600 NX = 0 T = 700.
Q: In an economy, autonomous consumption is $10. If Income is $90 and the mpc is 0.9, how much is…
A: Marginal propensity to consume refers to change in consumption with respect to change in income.…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- The difference between planned and unplanned spending is Select one: O a. always negative O b. unplanned changes in inventories O c inventories O d. always positiveADVANCED ANALYSIS Assume that the consumption schedule for a private closed economy is such that consumption is: C = 100 + 0.75Y Assume further that planned investment Ig is independent of the level of real GDP and constant at Ig = 50. Recall also that, in equilibrium, the real output produced (Y) is equal to aggregate expenditures: Y = C + Ig Instructions: Enter your answers as whole numbers.a. Calculate the equilibrium level of income or real GDP for this economy. Equilibrium GDP (Y) = $ . b. What happens to equilibrium GDP if Ig changes to 60? Equilibrium GDP (Y) = $ . What does this outcome reveal about the size of the spending multiplier? Spending multiplier = .In a closed economy with no government, aggregate expenditure is Select one: O a. None of the options O b. Net Tax plus Consumption O c. consumption plus the MPC O d. saving plus investment.
- For an economy the following functions have been given:C = 100 + 0.8YS = -100 + 0.2YI = 120 – 5rMs = 120Md = 0.2Y – 5rCalculate the following:5.1.1. IS equation 5.1.2. LM equation 5.1.3. Equilibrium level of income 5.1.4. Equilibrium level of interest rate. 5.1.5 Calculate National saving. 5.1.6 Calculate money demand 5.1.7 Find consumption9. Suppose Amal calculates her permanent income by adaptive expectations . Year 2020 Amal's permanent income was 38,000 , and year 2021 actual income is 41,000 . Assume that , long - run marginal to consume is 0.90 and short - run marginal propensity to consume is 0.28 . What is her consumption expenditure year 2021 ? O 36.774 O 35,040 O 40.226 O 33.454 O 34.740 O None of the above is correct5 3. permanent Income Hypothesis a) suppose that beta=.9 and R= 2222 (that is ~22%). For an individual who acts according to the PIH, will their consumption next period be higher than current consumption or lower? b) What is the main crucial difference between the Keynesian Consumption function and the consumption function derived from the PIH (or Lifetime Income Hypothesis)? c) If Present Value of future income stream is 500,000 and a person has a beta of.8, how much will their consumption go up today if only today's income increases by 1000? How much will their consumption increase (approximately) if their income goes up by 1000 in all periods?
- 2. In macroeconomic theory, total or aggregate spending is denoted by A and total or aggregateproduction of income by Y. Which one of the following statements is incorrect? A When A is greater than Y, there is disequilibrium and Y will tend to increase.B When A is equal to Y, there is equilibrium and Y will remain unchanged.C When A is less than Y, there is disequilibrium and Y will decrease.D When A is greater than Y, there is disequilibrium and A will decrease.1. In using the expenditure approach to GDP, consumption.... 2.The long -run aggregate supply curve is ? 3. National saving equals private saving plus government saving ,which inturn equals? 4. The mpc and mps measures charges in consumption expenditure and saving that result from changes in ? 5. The sum of the components aggregate expenditure that are not influence by real GDP is called ?Suppose that consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment spending initially rises by $20 billion for every 1 percentage point fall in the real interest rate. Also assume that the economy’s multiplier is 4. b. In what direction and by how much will it eventually shift?
- 1. Show that equilibruim level of income is at a point where consumption plus investment schedules intersect the 45 degree line. 2. Suppose the level of autonomous investment in an economy is K200,000 and the consumption function is given below as c = 80+0.8Y, what will be the equilibrium level of income. 4.if MPcC is 0.8, what will be the increase in the level of income if investment is increased to K400,000. 5. What increase in investment is needed to raise the income by K4000, if MPC is 0.75? How much will be the increase in consumption and saving due to this increase in income. 3. Given the consumption level C= 50 + 75Y, if we assume autonomous investment is K200,000 at what level of income will savings become equal to investment?(a) Suppose in a simple Keynesian economy, planned consumption function is given by C=250+0.65(Y-T). Planned investment, government purchases, taxes are $100 million, $100 million and $150 million respectively. What is MPC, MPS and autonomous consumption Derive the saving function. What is the equilibrium level of income? Y= AD=C+I+G If government purchases increase to $150 million, what is the new equilibrium level of income? What level of government purchases is needed to achieve an income of $2000 million? From question e) you get the newly government purchase. Now find out the multiplier value What is the amount of shift in AD curve? [Use the multiplier value from e)] (b) In a self-regulating economy “X”, labor supply is 40 million but labor demand is 10 million. What will happen in goods and service market simultaneously? Explain this situation with relevant graph. Based on your findings in a) is it denoting long run equilibrium? If not, will the economy be able to restore…Suppose that the real interest rate is 6%. Next, assume that some factors changes, such that the expected rate of return, declines by  two percentage points at each prospective level of investment. Assuming no change in the real interest rate, by how much and in what direction will the investment change?  which of the following might cause this change: (a) a decision to increase inventories; (b) an increase in excess production capacity.
