Explain the basic idea of the expenditure multiplier and also discuss the role consumer's play in determining its magnitude. (Minimum 150 words)
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1. Explain the basic idea of the expenditure multiplier and also discuss the role consumer's play in determining its magnitude. (Minimum 150 words)
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- Exhibit 10-3 DisposableIncomeYd ConsumptionC $2,000 $2,040 2,100 2,120 2,200 2,200 2,300 2,280 2,400 2,360 Refer to Exhibit 10-3. What is the multiplier?If the spending multiplier is 10, a S100 increase in government spending and Sl00 increase in taxes, will cause a inerease in GDP by 0 100 900 $1,000Y=E Autonomous expenditure = 3500 Equilibrium income = 9800 Full employment level of income is = 14000 i. Illustrate the above using a well labelled diagram. ii. What is the value of the multiplier in this economy? iii. Give the equation of the aggregate expenditure line.
- Required information Skip to question C = 800 + 0.8Y I = 1200 XN = 500 - 0.2Y G = 2000 Refer to the information above to answer this question. What is the equation for aggregate expenditures? Multiple Choice AE = 4,500. AE = 3,500. AE = 4,500 + Y. AE = 4,500 + 0.6Y. AE = 11,250 + 0.6Y.If MPC = .8, actual GDP = $5,000 and potential GDP = $4,900, there is a __________(recessionary / inflationary) gap of $_____ and a _________ (decrease / increase) in personaltaxes of $______ would eliminate the gap.Table 2 shows elements in the national income accounts of an economy. Assume the economy is currently in equilibrium. Elements £ billions Consumption (total) 80 Investment 9 Government Expenditure 6 Imports 15 Exports 8 What is the current equilibrium level of income? What is the level of injections? What is the level of withdrawals? If national income now rises by £22 billion and as a result, the consumption of domestically produced goods rises to £80 billion. Calculate the marginal propensity to consume (MPC)What is the value of the multiplier? What is the value of the multiplier? Comment on the results in part (3) and (4).
- Evaluating the relationship between R&D expenditures and net income is an example of the diagnostic analytics of __________. Multiple Choice determining relations/patterns/linkages between variables through statistical analysis performing drill-down detailed analytics identifying anomalies/outliers performing descriptive analyticsAssume: Y= C + I + G + NX C = 400 + (0.8)YD Io = 200 G = 300 + (0.1)(Y* - Y) YD = Y - TA + TR NXo = - 40 TA = (0.25)Y TRo = 50 Assume the equation for net exports changes from NXo= - 40 to NX1 = - 40 - mY. How would this affect expenditure multiplier, if we assume that 0 < m < 1?Given an economy is currently producing at $1.47 GDP, natural rGDP is $1.67, and the MPC is 0.94, then the multiplier for increases in aggregate expenditures is: A (round to ane decimal point). This means the federal government should increase its expenditures by A (whole number) billion dollars.
- No ai answer pls Explain the basic idea of the expenditure multiplier and the role consumers' playDetermine the change in the equilibrium level of consumption (find ΔC) following a decrease in government spending from 400 to 300 (ΔG = -$100). A: positive 400$ B: negative 300 c: negative 400 D: positive 300In Altus, income rose by $80 billion over the past year. During the same period, its aggregate expenditures increased by $55. What are the values of its MPE, MLR and multiplier?
