If the government began providing free textbooks to college students who would otherwise have bought their books from the private sector, the government's action would result in an increase in real Gross Domestic Product (GDP). a free market equilibrium. a direct expenditure offset. a Ricardian dilemma.
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- (a) Assume that Gross Domestic Product (GDP)/Total output (Y) is 6,000. Consumption (C) is given by the equation C = 600 + 0.6(Y – T) where T is the tax. Investment (I) is given by the equation I = 2,000 – 100r, where r is the real rate of interest, in percent. Taxes (T) are 500, and government spending (G) is also 500. What are the equilibrium values of C, I, and r?Economics a) Discuss the determinants of aggregate consumption and aggregate investment. Base onhistorical Australian data, which tends to fluctuate more – investment or consumption? You must also answer why it does this, Data must be sourced. (500 Word count) b) Suppose bad economic stats led investors to be more negative about futureprospects on earnings on investment projects. With the help of diagrams, review theimpact of this change on aggregate consumption and income. Word limit 600Below are the information of four sector economy. All values are in RM billon. The saving function [Fungsi tabungan] : S = -200 + 0.15 Yd Investment, [Pelaburan] : I = 500 Government spending [Perbelanjaan kerajaan] : G = 300 Tax [Cukai] : T =100 Export (X) : X=200 Import (M) : M=100 Based on the data above, calculate the: a. Find value of MPC. b. Derive the consumption function for the above economy c. Calculate the equilibrium level of national income using the AD-AS approach.
- Assume: PQ = $2.00 PL = $2.00 PK = $4.00 K MPK MP/PK MRP/PK L MPL MP/PL MRP/PL 1 28 7 14 1 15 5 10 2 24 6 12 2 12 4 8 3 20 5 10 3 9 3 6 4 12 4 8 4 6 2 4 5 8 2 4 5 3 1 2 6 4 1 2 6 1 0.5 1 7 2 0.5 1 7 0.5 0.25 0.5 8 1 0.25 0.5 8 0.25 0.13…Assume: PQ = $2.00 PL = $2.00 PK = $4.00 K MPK MP/PK MRP/PK L MPL MP/PL MRP/PL 1 28 7 14 1 15 5 10 2 24 6 12 2 12 4 8 3 20 5 10 3 9 3 6 4 12 4 8 4 6 2 4 5 8 2 4 5 3 1 2 6 4 1 2 6 1 0.5 1 7 2 0.5 1 7 0.5 0.25 0.5 8 1 0.25 0.5 8 0.25 0.13…Assume: PQ = $2.00 PL = $2.00 PK = $4.00 K MPK MP/PK MRP/PK L MPL MP/PL MRP/PL 1 28 7 14 1 15 5 10 2 24 6 12 2 12 4 8 3 20 5 10 3 9 3 6 4 12 4 8 4 6 2 4 5 8 2 4 5 3 1 2 6 4 1 2 6 1 0.5 1 7 2 0.5 1 7 0.5 0.25 0.5 8 1 0.25 0.5 8 0.25 0.13…
- What is Gross Domestic Product if investment spending is $1,879.99, households receive $170.17 in net interest income, wages equal $13,555.17, rental receipts on land are $1, total business profits before taxes are $1,611.03, and indirect business taxes are $1,329.47? Assume all other types of income and depreciation are zero and that other values for potential components of GDP are unknown for this example. Round your answer to two digits after the decimal.16- Which one of these will be deducted from gross output to determine the net output? a. Intermediate consumption b. Private income c. Factor income from abroad d. Total government spendingGiven thatG= 201= 35C = 0.9Ya + 70T= 0.2Y + 25Where, G, I, C, T and Ya are planned government expenditure and planned investment autonomous andconsumption expenditure and tax respectively.Calculate the equilibrium level of national income.
- Suppose an economy produces only 2 products that will also be used for directconsumption, as per the article at the end of the exam: chicken wings and donuts. Inthe second quarter of 2021 (the base period), 180,000 pounds of chicken wings wereproduced, at a value of $3.50 per pound, while in the second quarter of 2022,production of chicken wings increased to 200,000 pounds, at a value of $3.75 perpound. In the second quarter of 2021 (the base period), 85,000 donuts were producedat a value of $0.85 per donut, while in the second quarter of 2022, donut productionincreased to 100,000 donuts, each at a value of $0.95 per donut. The population inthis economy is 1000 individuals in 2022, while the number of hours worked in 2022is 5000. Also, the quantities that were produced in 2021 represent the quantities thatwere purchased by the typical household, meaning that everything that was producedwas sold.d. Solve for the amount of labor productivity in the second quarter of 2022.e. Solve for the…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 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).a. This is a list of domestic output and national income figures for a certain year. All figures are in billions. The questions that follow ask you to determine the major national income measures by both the expenditures and the income approaches. The results you obtain with the different methods should be the same. b. Now determine NI in two ways: first, by making the required additions or subtractions from NDP (method 1); and second, by adding up the types of income and taxes that make up NI (method 2). c. Adjust NI (from part b) as required to obtain PI. d. Adjust PI (from part c) as required to obtain DI.