Answered: if investment is $0.5 trillion,…

if investment is $0.5 trillion, government spending is $1 trillion, and next exports are -$0.5 trillion, the equilibrium GDP is:

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter19: The Keynesian Model In Action

Section: Chapter Questions

Problem 2SQP

See similar textbooks

Related questions

Q: Evaluating the relationship between R&D expenditures and net income is an example of the diagnostic…

A: Drill-down is an operation enabling a user to move from one point of data to another one in order to…

Q: The consumption function for a closed economy with no government sector is given by the equation: C…

A: C = 200 + 0.8Y Note:- we have taken all the parts separately no parts are connected with each…

Q: how will the different components of aggregate expenditure be affected by the increase in government…

A: The economics as a study is based upon the basic idea that resources which are present with the…

Q: If the MPC is 0.7 and investment increases by $4 billion, the equilibrium GDP will Multiple Cholce…

A: Aggregate demand refers is the overall demand for goods and services in an economy. The aggregate…

Q: Analyse the effect on equilibrium national income if the MPC falls from 0.95 to 0.4. Illustrate with…

A: National income is an income that is generated by summing the consumption, government expenditure,…

Q: If MPC in an economy is 0.73 and consumption spending increases by $1,172, what will overall GDP…

A: MPC is the marginal propensity to consume which is the percentage of change in consumption spending…

Q: An equation for Aggregate Expenditure is: AE = $3600 – 0.8Y, %3D In equilibrium, Income 'Y' =…

A: The aggregate expenditure is the overall expenditure in an economy over a given period of time. The…

Q: Calculate the equilibrium level of income in the economy, if C = 500+ 0.9Y. and investment…

A: Consumption function in the economy; C = 500+ 0.9Y Investment expenditure = 3000

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: The value of consumption at the equilibrium le of output and income is? Aggregate spending at full…

A: A recessionary gap corresponds to a positive GDP gap where actual GDP is less than potential, while…

Q: With an MPC of 0.8, government spending increases $20 billion while taxes decrease $10 billion.…

A: The effect of increase in government spending can be seen as: Multiplier: 11-MPC=11-0.8=5 The…

Q: If the economy is growing along the same path as potential GDP, the expenditure line will not shift…

A: In the mentioned question, the reaction of expenditure curves asked when there is growth in the…

Q: As a result of increas in investment by $125 billions, national income increases by $500 billion.…

A: Given the change in investment = $125 Change in national income = $500

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: 1) If investment spending depends on GDP, this is called induced investment? T/F 2) A change in…

A: When a good is manufactured with the use of factors of production, cost takes place for producing…

Q: The current value of Real GDP is greater than the equilibrium level of Real GDP. This implies that…

A: The macroeconomic equilbrium in an economy occurs when the aggregate demand and aggregate supply are…

Q: An equation for Aggregate Expenditure is: AE = $3600 – 0.8Y, n equilibrium, Income 'Y' = Aggregate…

A: The aggregate expenditure = C+I+G+NX. C= consumption expenditure. I= investment expenditure. G=…

Q: For Q1-3. For a closed economy, the consumption, investment and government spending are given as…

A: Given Consumption expenditure C=20+6Y1/2 .......(1) Investment expenditure…

Q: Given that: The government expenditure G = 40, the investment I = 60 the consumption C=(0.75)Ya+10,…

A: National income is equal to the sum of expenditures incurred by various sectors of the economy in…

Q: What is income-expenditure equilibrium? Derive aggregate demand curve from income expenditure…

A: Aggregate demand refers to the sum total of all individual goods and services demanded.The aggregate…

Q: An equation for Aggregate Expenditure is: AE = $3600 0.8Y, In equilibrium, Income 'Y' = Aggregate…

A: Given:

Q: Calculate the net cumulative change in the aggregate expenditure if taxes were cut by $200 billion…

A: Marginal propensity to consume measures the proportion of extra income that is spent on consumption.…

Q: Using the income-expenditure model, what is the expected effect (increase, decrease, or no effect)…

A: Income-expenditure method: It refers to the model under which the fluctuations and spending are…

Q: Determine aggregate expenditures (AE) in this economy when real GDP (Y) is equal to $1,500 billion,…

A: The aggregate expenditure refers to the amount of the money spent on the consumption, investment,…

Q: Autonomous Consumption R535m Marginal propensity to consume is 0.75 Investment Spending R322m…

A: C=C0+cYd C=Consumption C0=Autonomous Consumption C=Marginal propensity to consume Yd=Disposable…

Q: a) Calculate the national income equilibrium. b) Based on your answer in (a), show the aggregate…

A: Given Information- Autonomous consumption (Ā) is equal to RM 300 million Marginal propensity…

Q: Autonomous Consumption R535m Marginal propensity to consume is 0.75 Investment Spending R322m…

A: Formula to get equilibrium output is Y = C + I + G + X + M Where, C = Consumption I = Investment G =…

Q: If C is $90, Ig is $60, Xn is –$5, and G is $20, what is the economy’s equilibrium GDP

A: Equilibrium GDP Y = C + I + G + NX

Q: Find autonomous Expenditure from the following:- Autonomous consumption = $200 Marginal…

A: # The consumption expenditure for the household is considered to be as the goods and services on…

Q: If taxes ane decreased by $200 billion, given an MPC of .6, calculate the change in GDP. Give your…

A: The method of state receiving funds from its residents to compensate for basic utilities is known as…

Q: Find equilibrium level of national income from the following:- Autonomous consumption = $200 MPC…

A: The Given information is as follows:- Autonomous consumption = $200 MPC = 0.8 Investment = $100 We…

Q: Needs-tested spending O increases as real GDP increases. O makes recessions more severe.

A: All government, investment, consumption, and transfer payments are added up in government…

Q: If Full employment GDP is greater than equilibrium GDP, the economy is facing

A: Full employment GDP is the maximum level of GDP that can be attained in the long run. Equilibrium…

Q: “If taxes and government spending are increased by the same amount, there will be no effect on…

A: Answer: FALSE For example Assume the government invests an additional $100 million and the MPC is…

Q: Assume the current equilibrium level of income is $200 billion as compared to the full-employment…

A: MPC is the marginal propensity to consume which is the proportion of change in income spent on…

Q: Which of the following is true of aggregate expenditure? It is the sum of all injections plus…

A: In economics, aggregate expenditure is the current value of all the finished goods and services in…

Q: If the MPC is 0.8 and investment increases by $3 billion, the equilibrium GDP will increase by $15…

A: A fiscal multiplier provides the number by which iteration occurs in the expansion or contraction of…

Q: In the above table, C is consumption expenditure, / is investment, G is government expenditure, X is…

A: Option (b).

Q: rom the following data, determine the equilibrium level of real GDP.

A: Gross domestic product (GDP) is a standard measure of the value added created by a country's…

Q: Keynes developed his aggregate expenditure model to explain why some economies have faster economic…

A: Correct - how economies can reach equilibrium at a level of income below full employment

Q: D00 crore Q.22. In an economy, C = 1000 + 0.75Y is the consumption function, where C is consumption…

A: The total income (Y) of a consumer comprises of consumption spending (C) and the savings (S).

Q: TRUE/FALSE If aggregate expenditures exceed aggregate income then inventories will rise and firms…

A: The statement, given in the question "If aggregate expenditures exceed aggregate income then…

Q: 0.30. C = 100 + 0.4 Y is the Consumption Function of an economy where C is Consumption Expenditure…

A: # The sum of consumption and Savings is equal to the equilibrium level of national income. AD or Y…

Q: suppose you are given a consumption, investment and government expenditure functions as C= 700 +…

A: C= 700 + 0.6Y I= 360+ 0.3Y and G= 440

Q: As a result of increase in investment by $125, national income increases by $500. Calculate marginal…

A: Given that Change in investment = $125 CHange in national income =$500 We have to calculate…

Question

if investment is $0.5 trillion, government spending is $1 trillion, and next exports are -$0.5 trillion, the equilibrium GDP is:

Definition Video Definition Overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period. Video

Expert Solution

Step 1

Gross domestic product (GDP): - GDP is the market value of all final goods and services produced in any country in a given period of time.

$GDP = Consumer spending (C) + Investment spending (I) + Government spending (G) + Net exports (NX)$

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Calculate the equilibrium level of income in the economy, if C = 500+ 0.9Y. and investment expenditure is 3000.
“If taxes and government spending are increased by the same amount, there will be no effect on equilibrium GDP.” True or false? Explain and support your answer using a specific hypothetical example.
Suppose the aggregate expenditure schedule for an economy is given by the equation: AE = 800 + 0.8Y Where AE represents the aggregate expenditure and Y represents the national income (output) level. Calculate the equilibrium level of national income in this economy.
Determine 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 .
Let's say the autonomous Investment = $5,000, autonomous consumption = $12000, autonomous government expenditures = $3,000, autonomous net exports = - $2,000, and the mpe = .6. Now there is a banking crisis, and Investment drops $2,500. What is equilibrium GDP? Question 8 options: $15,500 $33,500 $48,750 $38,750 2
In the third quarter of 2008, investment in the U.S. totaled $4,2 trillion and in 2007, investment was $1,4 trillion. In addition, third quarter of 2007 real GDP was $48 trillion. Suppose the MPC in the U.S. is 0.80. Ignoring all other changes in spending, what is the new real GDP?
Suppose that in an economy with no government, the aggregate expenditure function is: AE = 50+0.75Y with an investment level of 100. i) Determine the level of planned expenditure when income is 150.