i. Find the equilibrium national income ii. Find the value of the injections in this economy iii. How much withdrawals are when the economy is in equilibrium
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An economy’s aggregate demand is specified as follows:
C = 300 + 0.8Yd, Investment (Io) = 230, Taxes (T) = 120 + 0.2Y, Government final purchase = 400, Export (X) =240 and Import (M) = 400.
i. Find the equilibrium
ii. Find the value of the injections in this economy
iii. How much withdrawals are when the economy is in equilibrium
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- An economy’s aggregate demand is specified as follows: C = 300 + 0.8Yd, Investment (Io) = 230, Taxes (T) = 120 + 0.2Y, Government final purchase = 400, Export (X) =240 and Import (M) = 400. Find the equilibrium national income? Find the value of the injections in this economy iii. How much withdrawals are when the economy is in equilibrium?Suppose an economy had aggregate demand components with the following relationships: Consumption spending, C=140+.60*(DY) Investment spending,I=25+.15*Y Government Spending, G= 0 Net Export Spending,X=0 Tax collections, Tx=0 a. What is the equilibrium income for this economy? b. If the government decided to increase G spending by 6, what would be the new equilibrium income for this economy? c. If instead the government decided to reduce Tx (taxes) by 10, what would be the new equilibrium income for the economy? d. If instead the government decided to increase G spending and Increase Tx (taxes) by 20, what would be the new equilibrium for this economy?Consider a hypothesis economy described by the following equation C=100 I=1200 X-1110 M=200+0.25Y T=250+0.3Y Required 1.Compute the equilibrium level of the national income 2.The level of consumption income after tax and net exports that corresponds to the equilibrium level national income
- Assume the following model of the expenditure sector: S=C+I+G+Nx TR=100 C=420+(4/5)YD I=160 G=180 Nx=-40 YD=Y+TR-TA TA=(1/6)Y If the government would like to increase the equilibrium level of output (Y) to the full employment level Y*=2,700, by how much should government purchases (G) be changed?18 - : If aggregate demand increases in an economy while aggregate demand is constant in the short run, which of the following statements is correct for the new equilibrium point?A) price decreases and national income increasesB) price rises national income risesC) price increases and national income does not changeD) price goes up and national income goes downE) price decreases and national income decreases.19 - : In which of the following expressions is the equation of change given correctly?A) MV=VK B) MT=PV C) MV=PT D) MP=VY E) MV=PTable 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).
- Consider an economy with the following features: Consumption, C = 130 + 0.5Yd Income tax, T = 20 + 0.2Y Investment, I = 200 – 600r Government expenditure, G = 112 Real money demand, Md/P = 50 + 0.5Y – 600r Nominal money supply, Ms = 600 Price level, P = 2 where Yd stands for disposable income, and r for the rate of interest. Derive the IS and LM equations. Calculate the equilibrium levels of income and rate of interest.Nigeria is currently experiencing a recessionary gap of approximately 24.6 billion krone. Its MPC is approximately 0.8. How much would the government have to change spending to close the gap? Assume a horizontal SRAS. If the government should decrease spending, enter a negative answer. one decimal plThe amount by which equilibrium real GDP exceeds full-employment GDP is known as (2pts) Question 12 - The amount by which equilibrium real GDP exceeds full-employment GDP is known as stagflation employment. a recessionary gap. an inflationary gap
- Nigeria is currently experiencing a recessionary gap of approximately 24.6 billion in their currency. Its MPC is approximately 0.8. How much would the government have to change taxes to close the gap? Assume a horizontal SRAS. If the government should decrease taxes, enter a negative answer. one decimal placeDetermine aggregate expenditures (AE) in this economy when real GDP (Y) is equal to $1,500 billion, $2,000 billion, and $2,500 billion.When Y = $1,500 billion, AE = billion .When Y = $2,000 billion, AE = billion . When Y = $2,500 billion, AE = billion .Problem 1 Consider the Aggregate expenditure model. Where:AD = C + I + G + NX where I, G, and NX are all autonomous.C = C + c∗(Y + T R − T A where T A = tY with t ∈ [0, 1] is the proportional tax rate and c∗ ∈ (0, 1) is the marginal propensity to consume.a. Using the information above, solve for AD. Combineall the autonomous terms into one term, A. b. In an (x, y) plane, where Y is on the horizontal axis and AD is on thevertical axis, illustrate the AD curve you derived above along with the 45degreeline.Make sure to explain how you got the Y-intercept and solve for the slope. c. Provide an economic interpretation for the slope of the AD function. d. Solve for the equilibrium level of output and show what happens to outputwhen G increases by 1 unit. That is, what is ∆Y ? Show your result graphicallyand explain how the AD curves shifts and by how much. Briefly explain. e) Suppose that ∆G = −1 and ∆T R = +2. Show what happens to theequilibrium level of output. Explain your result