i. What is the accelerator effect ii. Explain the difference between the accelerator and the multiplier. iii. Given that Country X has a nominal GDP of $100,000 and its real GDP is $45,000, calculate the GDP deflator.
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: An economy has a MPC of 0.80. Suppose only that taxes are increased by $300 billion. Calculate the…
A: MPC is the marginal propensity to consume which is the proportion of income spent on consumption.
Q: Ramey's estimate of the short-run "multiplier effect" of government purchases on GDP (i.e., dY/dG)…
A: According to Ramey, the inspection of the macroeconomic hypothesis and observational proof on the…
Q: Assume: Y= C + I + G + NX C = 400 + (0.8)YD Io = 200 G = 300 +…
A: The expenditure multiplier is the measure of change in the aggregate production caused by the change…
Q: Y=E Autonomous expenditure = 3500 Equilibrium income = 9800 Full employment level of income is =…
A: Y=E Autonomous expenditure = 3500 Equilibrium income = 9800 Full employment level of income is =…
Q: Multiplier Effect a. During a recessionary gap, is the goal to increase or decrease the equilibrium…
A:
Q: Automous consumption =100m Investment spending =100m Government spending 200milion…
A: please find the answer below.
Q: In an economy investment increases by 120 billion. The value of multiplier is 4. Calculate MPC.
A: Below is the given values: Increase in the investment = 120 billion Multiplier = 4 MPC = ?
Q: If the expenditure multiplier is 2.5 and the government spending increases by $4 billion, what would…
A: Given: Expenditure multiplier = 2.5 Government spending = $4 billion
Q: Is the mpc in the multiplier .75? only because multiplier is 1/(1-mpc) which would make sense for…
A: In the original question, MPS has given by stating "average households will save 25 cents of every…
Q: The following questions are on the hypothetical economy of Jacksonland. The multiplier is the idea…
A: Investment multiplier refers to change in income due to change in the investment, which is given by…
Q: d. If imports were to increase by $16000 so they are now equal to $32000, solve for net exports…
A: Real GDP Consumption Ig Government Export Import Net Export…
Q: The basic idea behind the multiplier is that an increase in GDP brings about an additional, larger…
A: Let I0 , G0 , and NX be the autonomous investment, government spending and net export of an economy…
Q: Using graphs show us what happens to P ,Y and the size of multiplier when a. SRAS is vertical b.…
A: AD shock when SRAS is vertical: As can be seen by the diagram, the initial equilibrium is at…
Q: 2. Calculate MPC, MPS and the Multiplier if consumption expenditure increases by $4,000 as a result…
A: Hi! thank you for the question but as per the guidelines, we answer only one question at one time.…
Q: Given that MPS = 0.5, what is the increase in real GDP from a $100 bllion rise in invetment? $100…
A: As per question, MPS=0.5. Let increase in real GDP be represented by ∆Y. "Increase in investment is…
Q: • Tax rate = 12.5% • Government expenditure = 100 1. The new aggregate expenditure function is AE =…
A: Disclaimer :- as you posted multipart questions we are supposed to solve the first 3 questions only…
Q: If the multiplier in an economy is 3, a $40 billion increase in net exports will Multiple Cholce…
A: GDP refers to the term of gross domestic product. It is the market value of final goods and services…
Q: If consumption is C=100+0.75Yd Taxes is T=50+0.5Y Export is X=200 Import is M=50+0.25Y…
A: The solution you've provided is incorrect. Export is autonomous and not dependent on output (Y).…
Q: If GDP is 3,900, the multiplier is 8, and G falls by 10, wha New GDP is $ billion.
A: Multiplier effect shows that the change in GDP will be greater than the change in spending that has…
Q: Suppose the Federal government raises taxes which would decrease consumption by $50 billion, that…
A: Change in equilibrium GDP=$50 billion Initial change in spending=50/5=10 50/10=5
Q: 5) If an increase in investment spending of $50 million results in a $400 million increase in…
A: Multiplier shows the change in the one factor to a change in the other related factors. It shows the…
Q: 88. Refer to the figure above. If planned aggregate expenditure (PAE) In an economy equals 2,000+.8Y…
A: Given, aggregate expenditure, AE = 2000 + 0.8Y At equilibrium, Y = AE Y = 2000 + 0.8Y Y-0.8Y = 2000…
Q: An economy has no imports and no income taxes, MPC is 0.9, and real GDP is $200 billion. Businesses…
A: Marginal Propensity to consume(MPC)=0.9 Real GDP=$200)Billion Increase in Investmnet=$10Billion…
Q: a. If money supply is increased by 20, what will be the new interest rate? Round your answers to one…
A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: YAS 742 + 15P – 28Poil YAD = 478 – 45P+ 18G Suppose initially, the Poil = $93 per barrel and…
A: Answer- "Thank you for submitting the question .But, we are authorized to solve only 3 sub…
Q: Suppose the economy of Country A is represented by the following equations: Z = C + I + G C = 500 +…
A: In equilibrium, Y = C + I + G
Q: Siven: C= 300 + 0.75Y I= 400 G= 300 T=100 b) Calculate the value of multiplier for this economy
A: Multiplier represents proportionality factor that determines that how much does an economic variable…
Q: Question 1 What is the accelerator effect Explain the difference between the accelerator and the…
A: Accelerator effect is a macroeconomic term used to define an economic situation where an increase in…
Q: Suppose that Actual GDP= 500, potential GDP = 400, And the mpc = .8. Please separately calculate the…
A: MPC = 0.8 Spending Multiplier = 1 / [1 - MPC]Spending Multiplier = 1 / [1 - 0.8]Spending Multiplier…
Q: If the current value of GDP is $13.28 trillion and the government is planning to increase spending…
A: Dear student since the value of multiplier is not mentioned in the question, I have solved it with…
Q: Refer to the information provided in Figure below to answer the question that follow. AE2 AE, B…
A: Expenditure multiplier refers to the multiplier that shows that what impact of change in autonomous…
Q: YAS = 1548 + 19P – 12Poil YAD = 412 – 33P+ 26G Suppose initially, the Poil = $86 per barrel and…
A: Goods market in equilibrium when aggregate demand and aggregate supply are equal to each other at…
Q: The multiplier for the economy in the above diagram: a. is 3 b. is 4.8 C. is 4 d is 5.2
A: The measure that depicts the final value of goods and services being produced in a year during an…
Q: Suppose that Kim K decides to spend $30,000 on an American‑made purse instead of donating it to…
A: The GDP multiplier indicates the amount of change in eth GDP of the economy which happens due to the…
Q: THE AGGREGATE EXPENDITURE MODEL (IN THE SHORT RUN)YOU MUST SHOW YOUR CALCULATIONS IN THE SPACE…
A: Given: Initial equilibrium output = $13 trillion Government increases its spending to $2.7 trillion…
Q: Suppose that Kim K decides to spend $30,000 on an American-made purse instead of donating it to…
A: In terms of GDP, the multiplier effect causes increase in total output to be greater than the…
Q: A fall in mps raises the GDP multiplier. O True O False
A: In an economy, marginal propensity to save refers to the economic measure to compute the change in…
Q: = 450 + 0.4Y I = 350 G = 150 X = 70 Z = 35 + 0.1Y T = 0.15Y Yf = 1550 Q.2.1 Calculate the level of…
A: We have the following information- C = 450 + 0.4Y I = 350G = 150X = 70Z = 35 + 0.1Y T = 0.15YYf =…
Q: In an economy investment in increased by $10 billion. As a result income rises by $50 billion. What…
A: This multiplier is called as the Keynes Investment Multiplier and measures the relationship between…
Q: 60. Assume a recessionary gap of $300 B exists in the U.S. macroeconomy. Also assume that the MPC…
A: Recessionary gap occurs when actual output is less than potential output.
Q: please show how you get M=0.5
A: Import is the process of buying products and services from foreign countries for consumption…
Q: Fill in the blanks with the number that corresponds to the correct word or phrase n the word bank 1.…
A: Disclaimer : as you posted multipart question we are supposed to solve only the first 3 as per the…
Q: QUESTION5 Given the following data, solve for equilibrium national income Y: • C = $200 + 0.9375Y •…
A: In the equilibrium Y = C + I +G Also multiplier shows the how much autonomous spending change due to…
Q: 3. For a closed economy, the following data is given: 50 + 0.8Y, Consumption C %3D Investment I 70…
A:
Q: If an economy is in recession, discuss the differing effects created by a tax cut vs. a GDP-G…
A: In an economy, recession refers to a situation when the actual output level falls short of the…
Q: If an economy were already at its potential GDP (ie its full-employment GDP), what would happen to…
A: A multiplier is a term used in economics to describe an economic element that, when raised or…
i. What is the accelerator effect
ii. Explain the difference between the accelerator and the multiplier.
iii. Given that Country X has a nominal
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- Question 1 What is the accelerator effect Explain the difference between the accelerator and the multiplier. Given that Country X has a nominal GDP of $100,000 and its real GDP is $45,000, calculate the GDP deflator.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 C) 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). D) What is the value of the multiplier? E) Comment on the results in part (c) and (d).Calculate the value of multiplier if change in income is $1100 million and the change in investment is $350 million
- Consider a 4-sector economy, the consumption spending is C = 500+0.75(Y-T), taxes are T = 10 + 0.2Y, and imports are M=0.2Y. Planned investment is Ip=300, government spending is G=250, and exports are X=10. What is the slope of the planned aggregate expenditure (PAE) line? a) 0.7 b) 0.5 c) 0.6 d) 0.3 e) 0.4Is the mpc in the multiplier .75? only because multiplier is 1/(1-mpc) which would make sense for .25 1-.75=.25 however what is mps?Y=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.
- 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 $1,000THE AGGREGATE EXPENDITURE MODEL (IN THE SHORT RUN)YOU MUST SHOW YOUR CALCULATIONS IN THE SPACE BELOWFOR THE NEXT PROBLEM USE THE FOLLOWING FORMULA:CHANGE IN GDP = [ 1 / (1-MPC) ] * CHANGE IN GInitially, the economy is producing $13 trillion in goods and services and the government is spending $2 trillion.Then the government decides to increase its spending to $2.7 trillion. What is the value of the spending multiplier?If the recessionary gap is $ 200 billion and the multiplier is 2, what is the increase in aggregate spending needed to bring the economy to full employment? a)$300 billion b)$ 600 billion c)$200 billion d) $66.6 billion
- In order for the economy (GDP) to be grow and take advantage of the multiplier effect, which one of these should be done? a. Increase agricultural production b. Increase taxes c. Increase the number of banks nationwide d. increase the manufacturing sector e. Increase government spending f. all of the choicesFind the value of change in investment if the value of multiplier is 5 and the change in national income is $1000 millionIn an economy investment increases by 120 million. The value of multiplier is 4. Calculate MPC.
