C= 50 + 0.75Y In 2019 in Arcadia, planned investment expenditure was $150, there was no government spending or taxation or government transfers and no exports or imports. Write out the planned Aggregate Expenditure function for Arcadia. AE= 200 + 0.75 d. If real GDP (i.e. value of all production in the Arcadian economy) in 2019 were $600, what would be the level of planned Aggregate Expenditure? Would production be exactly equal to expenditure, or would suppliers have to reduce or increase inventories? If you've answered that suppliers would have to reduce or increase inventories, specify the amount of the change and be sure to indicate whether it is an increase or a decrease. e. What was the income-expenditure equilibrium level of real GDP in Arcadia in 2019? Support your ansvrer by filling in all of the blank cells in the table below. (Note: you need to provide a numerical answer for the income-expenditure equilibrium level of GDP in Arcadia in 2019 AND fill in the table below) Planned Unplanned Aggregate Expenditure (AEp) Disposable Planned Investment Consumption (C) Income Investment Real GDP (YD) (Ip) (IL) 500 600 700 800 900 1,000

C= 50 + 0.75Y In 2019 in Arcadia, planned investment expenditure was $150, there was no government spending or taxation or government transfers and no exports or imports. Write out the planned Aggregate Expenditure function for Arcadia. AE= 200 + 0.75 d. If real GDP (i.e. value of all production in the Arcadian economy) in 2019 were $600, what would be the level of planned Aggregate Expenditure? Would production be exactly equal to expenditure, or would suppliers have to reduce or increase inventories? If you've answered that suppliers would have to reduce or increase inventories, specify the amount of the change and be sure to indicate whether it is an increase or a decrease. e. What was the income-expenditure equilibrium level of real GDP in Arcadia in 2019? Support your ansvrer by filling in all of the blank cells in the table below. (Note: you need to provide a numerical answer for the income-expenditure equilibrium level of GDP in Arcadia in 2019 AND fill in the table below) Planned Unplanned Aggregate Expenditure (AEp) Disposable Planned Investment Consumption (C) Income Investment Real GDP (YD) (Ip) (IL) 500 600 700 800 900 1,000

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter9: The Keynesian Model In Action

Section: Chapter Questions

Problem 18SQ

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