CI G (a) What is the current equilibrium level of national income? = 60+5+8+710:70 (b) What is the level of injections 5+ 8 + 7 206 (c) What is the level of withdrawals lo 7b 5-? (d) Assuming that tax revenues are 7 billion, how much is the level of savings? 13-50 (e) If national income now rises to 80 billion, and as a result, the consumption of domestically produced goods rises to 58 billion, what is the mpca (f) What is the value of multiplier? (g) Given the initial level of national income of 80 billion, now assume that spending on exports rises by 4 billion, spending on investment rises by 1 billion, and government expenditure falls by 2 billion. By how much the national income will change? 8040 I=6 83 Q2. You find the following economic data for a closed economy Utopia: Marginal propensity to consume = 0.6, Investment = 30, Governement spending = 20 Government revenues =20 (Tax collection) People will consume a minimum of 10, no matter what their income is. 1. What is the equilibrium output for this economy? 2. What's the value for the multiplier and autonomous spending? 3. In how much will output increase if the government decides to increase spending in 1 more unit? 4. In how much will output increase if the government increases spending, but keeping a balanced budget? 5. The government decides to increase total savings in the economy. In order to do that it implements a program that reduces the marginal propensity to consume to 0.5. In how much will totalsavings increase? Explain. Q3. The Zhinian economy is described by the following pieces of information. Equilibrium Output (E=Y) Potential or Full Employment Output Yf= 8,000 billion zhins Marginal Propensity to consume MPC = 0.75 Remember that AD in the text is Ye= C+I+G +X-M Ye = 10,000 billion zhins
CI G (a) What is the current equilibrium level of national income? = 60+5+8+710:70 (b) What is the level of injections 5+ 8 + 7 206 (c) What is the level of withdrawals lo 7b 5-? (d) Assuming that tax revenues are 7 billion, how much is the level of savings? 13-50 (e) If national income now rises to 80 billion, and as a result, the consumption of domestically produced goods rises to 58 billion, what is the mpca (f) What is the value of multiplier? (g) Given the initial level of national income of 80 billion, now assume that spending on exports rises by 4 billion, spending on investment rises by 1 billion, and government expenditure falls by 2 billion. By how much the national income will change? 8040 I=6 83 Q2. You find the following economic data for a closed economy Utopia: Marginal propensity to consume = 0.6, Investment = 30, Governement spending = 20 Government revenues =20 (Tax collection) People will consume a minimum of 10, no matter what their income is. 1. What is the equilibrium output for this economy? 2. What's the value for the multiplier and autonomous spending? 3. In how much will output increase if the government decides to increase spending in 1 more unit? 4. In how much will output increase if the government increases spending, but keeping a balanced budget? 5. The government decides to increase total savings in the economy. In order to do that it implements a program that reduces the marginal propensity to consume to 0.5. In how much will totalsavings increase? Explain. Q3. The Zhinian economy is described by the following pieces of information. Equilibrium Output (E=Y) Potential or Full Employment Output Yf= 8,000 billion zhins Marginal Propensity to consume MPC = 0.75 Remember that AD in the text is Ye= C+I+G +X-M Ye = 10,000 billion zhins
Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations
Section: Chapter Questions
Problem 18P
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