How do budget surpluses and budget deficits affect the consumption and investment components of GDP

Q: If GDP is $3,400 billion, the multiplier is 5, and I rises by 15, what is the new level of GDP? The…

A: GDP is the value of final goods and services produced in the economy within a given period of time.

Q: What are government transfer payments? Are they included as part of the government spending…

A: In an economy, all the economic activities performed by the citizens that resulted in income value…

Q: Consumption function: C = 250 + 0.8Y Investment spending: I = 150 Government spending: G = 500…

A: Autonomous spending is independent of income. Autonomous spending = 250 + 150 + 500 + 200 - 150 =…

Q: Write 3 difference between revenue expenditure and capital expenditure

A: The 3 difference between revenue expenditure and capital expenditure are as follows:-

Q: Analyse how the level and pattern of household spending may change when GDP decreases

A: Gross Domestic Product (GDP) is the value of final goods and services produced in the domestic…

Q: What is the level of autonomous expenditure in this economy? Instructions: Enter a whole number.…

A: Autonomous expenditure is the vertical intercept of PAE curve, which is value of PAE when Y is zero.

Q: Subpart #11 to be answered     Suppose a small economy has two income tax rates: 15% for all…

A: Marginal Propensity to Save(MSP):  MPS in Keynesian economic theory represents the proportion of an…

Q: In national income accounting, government purchases include: purchases by the Federal government…

A: Government purchase includes government spending on goods and services, by federal, state and local…

Q: (Use for a and b)Suppose the interest on the debt was $700 billion. If interest is paid…

A: a. The total debt of the country is given as $700 billion and 90 percent spend for interest. The…

Q: Please calculate level of GDP in equilibrium, consumption and savings level if you know that: I…

A: Given  I (investment) = 300 C  (Autonomous Consumption) = 100 MPS (Marginal Propensity to Save) =…

Q: Suppose the interest on the debt was $700 billion. If interest is paid domestically, 90% will be…

A: Given: The total debt of the country is given as $700 billion  100% interest is paid domestically…

Q: Given all the information in the table please refer and give me answer All Numbers are in S Billion…

A: At an output level of $1600, consumer spending is $1300, investment spending is $200 and government…

Q: You are given the following information about a closed economy with no government: Consumption = 445…

A: Given: In a closed economy with no government, Consumption(C)=445+0.75Y Investment (I) = 250

Q: The government of a country decides to double its current level of spending, causing real GDP to…

A: Gross domestic product (GDP): - GDP is the market value of all final goods and services produced in…

Q: Suppose the government seeks to achieve a balanced budget by levying taxes of $50 billion and making…

A: If MPC=0.8 then  MPS=1-MPC MPS=1-0.8 MPS=0.2

Q: Which of the following is a leakage from the circular flow of income and expenditure in South…

A: Leakage is something which lowers the income across the economy (outflow of income) and injection is…

Q: a. Using the above data, determine GDP by both the expenditures approach and the income approach.…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 4. A(n) shows the relationship between national income (GDP) and total spending a) balance sheet b)…

A: A consumption work shows the connection between genuine GDP (or public pay) and consumption levels,…

Q: If government spends $10B and the MPC in the economy is .8.  What will be the total change in GDP?

A: A multiplier is a term used in economics to describe an economic factor that, when increased or…

Q: The table below details the composition of an economy's GDP by spending category. Category…

A: Consumption includes spending on durable, nondurable and services. Construction of new home is a…

Q: Calculate GDP using the expenditure approach (Amount in billions of dollars): Corporate profits: $…

A: Expenditure approach GDP formula is as follows :- GDP = Consumption Expenditure + Investment…

Q: 3.4 Suppose real GDP is currently $12.5 trillion and potential real GDP is $13 trillion. If the…

A: Answer (3.4). The real GDP is currently $12.5 trillion and the potential GDP is $13 trillion. The…

Q: Please calculate level of GDP in equilibrium, consumption and savings level if you know that: I…

A: Consumption function: C = Ca + bYD  where YD = Y - T = Y - tY, and b: MPC = 1 - MPS = 1 - 0.1 = 0.9…

Q: Classify each of the following items as a final good or service or an intermediate good or​ service,…

A: A. A textbook bought by a student is a final good that is consumption expenditure. Consumption goods…

Q: If consumption expenditures are $1800 million, gross investment is $450 million, imports are $350…

A: The output or the real GDP would be the sum of the consumption,investment, government expenditure,…

Q: Assume that the consumption function for the above economy is C = 1000 + .75Yd fill in the empty…

A: Aggregate expenditure is the total expenditure incurred by all the sectors of the economy on the…

Q: If MPC is = 0.6 and government spending decreases by dollar 100 billion, what happens to equilibrium…

A: Marginal proepensity to consume = 0.6 Decrease in spending = $100 billion

Q: 72. Which of the following expenditures would increase the consumption component of GDP?

A: Under the expenditure approach, GDP is equal to the total amount of money spent on personal…

Q: Which of the following is correct? The relationship between the MPS and the MPC is such that: Select…

A: Hi! Thank you for the question as per the honour code, we’ll answer the first question since the…

Q: 1. Assume an economy where spending for each sector is: Household: C = 800 + 0.95Qd Business: I =…

A: Hello, thank you for the question. Since there are many subparts in the question, only the first…

Q: Spending (bilions of dollars) 800 45-degree line 700 AE 600 500 400 300 200 100 100 200 300 400 500…

A: Answer -

Q: Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300…

A: In the income-expenditure model, the equilibrium occurs at the level of GDP where aggregate…

Q: From the given data calculate the investment expenditure 1) Equilibrium level of income = 5000 2)…

A:

Q: Use the following to answer questions Item In trillions of Rs. GDP 17.6 Govermment purchases 1.9…

A: Gross domestic product (GDP) is the standard measure of the value added created through the…

Q: Suppose that GDP was $250 billion in year 1 and that all other components of expenditures remained…

A: GDP stands for gross domestic product which is the sum of value of all goods and services produced…

Q: What are variables that affect AS (also considered the Supply side of GDP)?

A: The total output of the commodities that are produced within the country by the entrepreneurs for…

Q: The table below provides income and consumption data in billions of dollars: Disposable Income…

A: Savings is a function of the disposable income. Given consumption and the disposable income, savings…

Q: 14. Explain the statement that for small spending rates (r 1/2), the percentage change in the…

A: * Hi there , as you have posted multiple questions , as per our guidelines  we are  only going to…

Q: What is the role of government in the circular flow of income and expenditure?

A: The circular flow of income model is the demonstration of the movement of money through society.…

Q: Considering the recent expenditure of governments across the world in providing vaccines free of…

A: The following problem has been solved as follows:

Q: tures are more t

A: A private closed economy is an economy being driven by consumer spending or consumption and private…

Q: what ia aggregate spending

A: When studying economics, there are various economic terms that an individual needs to know and…

Q: Explain the items of government expenditure in detail?

A: Government expenditure means including all government expenses Like spend on people welfare schemes,…