If an economy is in equilibrium when national income is $1000, and the level of autonomous expenditure is $600, what is the value of the marginal propensity to withdraw? - Imagine an economy where autonomous expenditure is $50, and the equilibrium level of national income is $125. How much would autonomous expenditure have to increase by to achieve full employment output of $150 ?
Q: Suppose that autonomous consumption (a) is 300, private investment spending (I) is 420, government…
A: We know, from the fundamental macroeconomic identity, Y = C(Y - T) + I + G Where Y represents the…
Q: Suppose that the level of GDP increased by $300 billion in a private closed economy where the…
A: Answer: Given, Change in GDP ∆GDP=$300MPC (marginal propensity to consume)=0.9Change in aggregate…
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A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: Assume that the full-employment level of output is $1,000 and the price level associated with…
A: The expenditure multiplier effect measures the impact that a change in autonomous spending will have…
Q: Assume a closed economy where the level of I is 300, G=T=150 and the savings function is S= −30 +…
A: Since you have multiple questions, we will answer the first question and its first three sub-parts…
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A: Note : Since yove uploaded multiple questions, only the first question shall be answered at a time .…
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A: Here given, Income level of the economy is at 50 At equilibrium point aggregate expenditure (i.e…
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Q: 1. Find Equilibrium output/ national income with given following
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Q: 1. If the marginal propensity to consume is .6 and taxes are increased by 200 then equilibrium…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Consider a closed economy with demand for goods as follows: Yd = C+I+G C= 200+0.80 ( Y-T) I= 600…
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Q: 2. (a) Given the marginal propensity to import M'(Y) = 0.1 and the information that M = 20 when Y =…
A: Answer: (a). Given, Marginal propensity to import M'Y=0.1At Y=0, M=20 Let us integrate both sides of…
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Q: Marginal propensity to consume = 0.8; In an economy with tax rate = 0.25 and Marginal propensity to…
A: Given: MPC = 0.8 MPI= 0.10 Tax rate= 0.25 Increase in autonomous spending = 250 units.
Q: Suppose a closed economy has an intended investment of 100 and an aggregate consumption function…
A: Given information: C=250 + 0.75Yd -----> Consumption function I = 100 ------------> Investment…
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Q: Suppose that an economy is in equilibrium at a level of output of $600 million. Suppose further that…
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A: Given, Autonomous consumer spending = $200 billion. Autonomous investment spending = $100 billion.…
Q: Suppose a closed economy has an aggregate consumption function given by C = 300 + 0.75Yd and…
A: Given Information- Aggregate consumption function C = 300 + 0.75Yd Equilibrium level of income…
Q: Assume that government purchases decrease by $10 billion, with other factors held constant,…
A: The autonomous spending multiplier shows the change in national spending as a result of a change in…
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A: Given Consumption function C=200+0.75(Y-T) Planned Investment I=100 Government purchases =100…
Q: Suppose a closed economy with no government spending or taxing is capable of producing an output of…
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
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- 34.With the additional leakages of imports and taxes in additional to savings in a public, open economy, how is the economy still able to reach equilibrium? 35.Compare and contrast the recessionary expenditure gap and the inflationary expenditure gap. 36.If there is a recessionary expenditure gap of $100 billion and the MPC is 0.80, by how much must taxes be reduced to eliminate the recessionary expenditure gap?Suppose a closed economy with no government spending which in equilibrium is producing an output and income of 2250. Suppose also that the marginal propensity to consume is 0.75, and that, if at full employment, the economy would produce an output and income of 3050 By how much would the government need to cut taxes (T) to bring the economy to full employment?Question 4 Suppose a closed economy has an aggregate consumption function given by C = 50 + 0.75Yd and generates $2200 output and income in equilibrium. Suppose also that the government spends 400 and imposes a lump-sum tax of 50. What is the level of intended investment? (round your answer to the nearest whole value)
- Suppose that initially equilibrium income was 200 units and that this was also the full employment level of income. Assume that the consumption function is C=25+0.80YD and that, from the initial equilibrium level of income, we have now investment decline of 8 units? What will be the new equilibrium level of income? What increase in government spending would be required to restore income to the initial level of 200? Alternatively, what reduction in tax collection would be sufficient to restore an income level of 200?Assume that government purchases decrease by $10 billion, with other factors held constant, including the price level. Calculate the change in the level of the real GDP demanded for each of the following values of the MPC. Then, calculate the change if the government, instead if reducing its purchases, increased autonomous net taxes by $10 billion. a. 0.9 b. 0.8 c. 0.75 d. 0.6Suppose a closed economy has an aggregate consumption function given by C = 100 + 0.75Yd and generates $3000 output and income in equilibrium. Suppose also that the government spends 300 and imposes a lump-sum tax of 50. What is the level of intended investment? (round your answer to the nearest whole value)
- Only typed answer Assume that marginal propensity to consume is 0.8 and full-employment level of output is $800 billion. If the actual real GDP is $700 billion, find the change in lump-sum taxes that would bring the economy back to its full-employment level of output (assume taxes and transfer payments do not depend on income and the economy is a closed economy).Consider an economy similar to that in the preceding question in which investment is also $200, government purchases are also $500, net exports are also $30, and the price level is also fixed. But taxes now vary with income and, as a result, the consumption schedule looks like the following: GDP Taxes DI C $1,360 $320 $1,040 $810 1,480 360 1,120 870 1,600 400 1,200 930 1,720 440 1,280 990 1,840 480 1,360 1,050 Find the equilibrium graphically. What is the marginal propensity to consume? What is the tax rate? Use your diagram to show the effect of a decrease of $60 in government purchases. What is the multiplier? Compare this answer to your answer to Test Yourself Question 1. What do you conclude? GDP…Q1. Find Equilibrium output/ national income with given following C = 140 + 0.9 (Yd) This is the consumption function where 140 is autonomous consumption, 0.9 is the marginal propensity to consume, and Yd is disposable (i.e. after tax income). Yd = Y- T, where Y is national income (or GDP) and T = Tax Revenues = 0.3Y; note that 0.3 is the average income tax rate. I = Investment = 400 G = Government spending = 800 X = Exports = 600 M = Imports = 0.15Y
- Suppose a closed economy has an aggregate consumption function given by C = 300 + 0.75Yd and generates $2200 output and income in equilibrium. Suppose also that the government collects a lump-sum tax of 300. How much will the private sector be saving total in equilibrium? (round your answer to the nearest whole value)Assume that the full-employment level of output is $1,000 and the price level associated with full-employment output is 100. Also assume that the economy's current level of output is $1,100 and, at the price level of 100, current aggregate demand is $1,200. If the government moves the economy back to the full-employment level of output by reducing government purchases by $50, then the expenditures multiplier equals Multiple Choice 10. 4. 5. 2.From the table below answer the following questions Y C I G AE 0 20 15 25 100 100 15 25 200 180 15 25 300 260 15 25 400 340 15 25 500 420 15 25 1- What is the value of autonomous Consumption? 2- What is the value of new equilibrium if government purchases increase by $100? 3- What is the value of equilibrium consumption? 4- What is the value of autonomous Aggregate Expenditure?