Consider an open economy described by the following equations: C = 400 + 0.90 (Y – T) X = 100 - 0.10 Y I = $300 G = $200 T = $150 What is the equilibrium level of national income
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Consider an open economy described by the following equations:
C = 400 + 0.90 (Y – T) X = 100 - 0.10 Y
I = $300 G = $200
T = $150
- What is the equilibrium level of
national income ?
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- Consider a closed economy without a government. If the GDP of the economy is $63,000 and the consumption in the economy is $45,000, the saving rate in the economy is ________. 86 percent 24 percent 57 percent 75 percentWhich of the following equations is correct for an economy that does not have a government or a foreign sector? Multiple Choice MPC × MPS = 1 MPC/MPS = 1 MPC - MPS = 1 MPC + MPS = 1Equilibrium GDP(Y)= Total demand is _ ___ (equal, greater, less) to production Private saving= Public saving= Total saving is _______ (equal, greater, less) investments
- Given the following on a closed economy, determine the following The level of Private savings The level of Public savings The level of national savingFor the goods market of an open economy to be in equilibrium, the interest rate must be at 2% when GDP equals 120. We also know the following about consumption (C), investment (1), fiscal policy (taxes T and government expenditures G), imports (M) and exports (X) of the country: C = 20 + b*Y_{D} I = 44 T = 60 G = 22 M = 16 X = 32 where b is the marginal propensity to consume and Yo is net disposable income. What is the value of total consumption? Select one: a. 18 b. 20 C. 38 d. 120What effect will each of the changes listed in Study Question 3 of Chapter 27 have on the equilibrium level of GDP in the private closed economy? Explain your answers.
- In a closed economy, subsistence consumption is 10 billions, households spend 60% of their net disposable income on leisure consumption, investment is constant at 40 billions, taxes are 20 billions, government spending is 20 billions and the gross domestic product is 145 billions. Assume that suppliers always respond to variations in demand, that it takes them 1 month to adjust to new demand levels and that they make adjustments once per month (if any). One day, the government increases its spending to 30 billions. After 2 months (at the end of the 2nd month), by how much has the gross domestic product increased? Select one: a. 16 b. 25. c. 32 d. 50consider the following hypothetical economy. The economy is closed, meaning the economy neither exports or imports. And the economy national saving us 20 trillion and government expenditure is 5 trillion. What is the level of investmentConsider the changes in equilibrium that are presented in the following graph: The change from E0 to E2 is caused by.. Answer Choice Group Appreciation of the national currency Depreciation of the national currency Increase in taxes paid by companies in the country A decrease in the price of gasoline
- Is a family a household? Is a household a family? Which sector (Households, Businesses, or International) spends the most? Which sector spends the least? Which sector, because of its volatility, has an importance greater than is warranted by its size? What does it mean if net exports are negative? People sometimes argue that imports should be limited by government policy. Suppose a government quota on the quantity of sugar to be imported to the United States occurs. What is likely to happen to the price of sugar in the United States and in the rest of the world? List the four sectors of the economy along with the type of spending associated with each sector. Order the types of spending in terms of magnitude, and give an example of each kind of spending. Using the interconnection between sectors of the economy, explain the effects of imposing an increase in taxes on the household sector.Consider the following equations for a small open economy C = 2500 + 0.85Yd; T = 700 + 0.25Y; G = 8000; TR = 800; I = 4000 + 0.2Y; M = 3000 + 0.25Y; X = 2000 Use the reduced form equation to compute equilibrium national income. Compute the values of disposable income, consumption expenditure, tax revenue, and net exports. Using a measure, you are familiar with, demonstrate if the economy is operating a balanced budget.The data in columns 1 and 2 in the accompanying table are for a private closed economy:a. Use columns 1 and 2 to determine the equilibrium GDP for this hypothetical economy. b. Now open up this economy to international trade by including the export and import figures of columns 3 and 4. Fill in columns 5 and 6 and determine the equilibrium GDP for the open economy. Explain why this equilibrium GDP differs from that of the closed economy.c. Given the original $20 billion level of exports, what would be net exports and the equilibrium GDP if imports were $10 billion greater at each level of GDP?d. What is the multiplier in this example?
