i need the answer quickly Consider a Keynesian model:Full employment output R100 millionTax rate = 0,25Investment =R40 millionAutonomous consumption R30 millionMarginal propensity to consume = 0,83.28 The value of the multiplier is ...[1) 2[2] 1.67[3] 2.5[4] 43.29 The equilibrium level of income is...[1] R70 million.[2] R175 million.[3] R280 million.[4] R140 million.3.30 To bring about full employment, government spending should be[1] -R30 million.(2) -R72 million.[3] R30 million.(4) R75 million.

Given- Full employment output -R100 million Tax Rate = 0.25 Investment = R40 million Autonomous…

Answered: Consider a Keynesian model: Full…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter10: Keynesian Macroeconomics And Economic Instability: A Critique Of The Self Regulating Economy

Section: Chapter Questions

Problem 7QP

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In the Keynesian cross model, assume that the consumption function is given byC = 110 + 0.75(Y - T). Planned investment is 300; government purchases is 350. Assume a balanced budget.a. Graph planned expenditure as a function of income.b. What is the equilibrium level of income?c. If government purchases increase to 400, what is the new equilibrium income? What is the multiplier for government purchases?d. What level of government purchases is needed to achieve an income of 2,200? (Taxes remain unchanged.)e. What level of taxes is needed to achieve an income of 2,200? (Government purchases remain at 350.)
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) Given the following simple Keynesian Model: Y = C + I + G + X-M, where Consumption schedule is given as C= 100 +0.75Y Investment (I) = 50 Government (G) = 100 and Net Export (X-M) = 20 i. Calculate the Equlibrium Level of Income [4 Marks] ii. Calculate the size of Consumption at the Equilibrium Level [2 Marks] iii. Calculate the value of the Government Multiplier [2 Marks] iv. Assume Investment (I) changes by 50; calculate the new equilibrium level of Income
) Given the following simple Keynesian Model: Y = C + I + G + X-M, where Consumption schedule is given as C= 100 +0.75Y Investment (I) = 50 Government (G) = 100 and Net Export (X-M) = 20 i. Calculate the Equlibrium Level of Income ii. Calculate the size of Consumption at the Equilibrium Level iii. Calculate the value of the Government Multiplier iv. Assume Investment (I) changes by 50; calculate the new equilibrium level of Income
Consider a keynesian macromodel Y=(C0+G+I) / (1-c) where C0 is autonomus consumption, G is government consumption expenditure, I is investment expenditure, c is the marginal propensity to consume. Assume constant marginal productivity of labor. What will be the result of an increasing government consumption expenditure in this module, if not other paramiters are changed? a. Lower investment. b. Higher employment. c. Higher inflation. d. Lower employement.
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n the Keynesian cross model, assume that the consumption function is given by C = 110 + 0.75(Y - T). Planned investment is 300; government purchases is 350. Assume a balanced budget. a. Graph planned expenditure as a function of income.b. What is the equilibrium level of income?c. If government purchases increase to 400, what is the new equilibrium income? What is the multiplier for government purchases? Solve D and Ed. What level of government purchases is needed to achieve an income of 2,200? (Taxes remain unchanged.)e. What level of taxes is needed to achieve an income of 2,200? (Government purchases remain at 350.)
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Problem 1. Keynesian Cross: The economy is described by the following functions: C110+ 0.8YD Tr = 20 Tr= 40 I 70 G = 80 NI = 30 = Q1. Express aggregate demand as a function of overall income Y. • Q2. Write down a condition that describes equilibrium in the Keynesian Cross diagram • Q3. Substitute all the information that you were given and find equilibrium output. • Q4. Find the multiplier associated with government purchases. • Q5. Suppose government purchases increase by 20. By how much would the equilibrium output increase? • Q6. Illustrate change in government purchases on the Keynesian Cross diagram. • Q7. Suppose transfers increase by 20. By how much would the equilibrium output increase? Problem 2. Keynesian Cross with proportional taxation: The economy is described by the following functions: C Tz Tr C+cYD t-Y = Tr I = i G = G Nz = N₂ where t is the tax rate. Note the difference with the setup derived in class: here, the amount of taxes collected depends positively on the gross…

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