In a simple economy (assume there are no taxes, thus Y is disposable income), the consumption function is: C = 200 + 0.75Y. Investment is equal to 300. In this economy, equilibrium GDP is YRound your answer to the nearest dollar)

Q: Consider two economies (1 and 2) where in equilibrium, the level of aggregate income (Y) is the sum…

A: Aggregate income is the sum total of all the incomes in an economy without adjustments.  As given in…

Q: We use the following terminology in this part: aggregate income Y and disposable income Ya (= Y –T),…

A: The aggregate expenditure (AE) is the total expenditure by the economy. In other words, it is also…

Q: Level of investment goes up by 200. What happens with the level of GDP if you know that MPC = 0,8…

A: It is given that MPC=0.8 t=0.1

Q: The aggregate consumption function is C=1,000 + 0.9Yd. If income is $3,600 and net taxes are $600,…

A: Given: C=1000+0.9YdY=3600t=600

Q: Suppose a closed economy has an intended investment of 200 and an aggregate consumption function…

A: The equilibrium level of output and income is the point where the aggregate expenditure is equal to…

Q: Which of the following statements is most accurate? a.Most of the variation in consumption…

A: The consumption expenditure is the expenditure made by the consumers towards the consumption of…

Q: The table shows disposable income and consumption expenditure in an economy.   Calculate saving when…

A: disposable income: Total personal income less personal current taxes equals disposable income.…

Q: Guideline Saving 2, (3, National Income 1. Only one of the lines in this graph does not represent…

A: The given graph shows the Keynesian view of economic equilibrium in terms of equating aggregate…

Q: Assume potential GDP is 3,500 and actual GDP is 3,000. If the consumption function is C=250+0.75Yd,…

A: Goods market is in equilibrium when aggregate demand and aggregate supply will be equal . And we…

Q: Assume that GDP (Y) is 6,000. Consumption (C) is given by the equation C= 600+ 0.6(Y – T).…

A: National savings come from two sources the public sector and the private sector. The private sector…

Q: Question. Suppose in an economy, autonomous investment (1) is $ 600 crores and the following…

A: Answer:   Hence income i.e I = 600

Q: Suppose a closed economy has an aggregate consumption function given by C = 50 + 0.50Yd and…

A: Gross Domestic Product (GDP) is the value of all the goods and services produced domestically in a…

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 MPC was equal to 0.5, would doubling your income double your consumption spending

A: The marginal propensity to consume (MPC) refers to the incremental change in income that is consumed…

Q: An economy has a national income of 2,118. Its government spending is 505, and taxes are 663. Given…

A: National income is the market value of all goods and services produced in the economy in a given…

Q: Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300…

A: GDP refers to the total value of finished goods and services that produced within the economic…

Q: If there is an increase in the personal income tax rate, and people do not receive a pay increase,…

A: The tax is a unilateral payment made by the public towards the government for various purposes such…

Q: Which of the following is true of disposable income? Group of answer choices It excludes transfer…

A: We are going to discuss the properties and various aspects of disposable income to answer this…

Q: YOU ARE REQUIRED TO SHOW A CALCULATION METHOD Based on the information given on a hypothetical…

A: Given: Savings (S)= -150 + 0.25Yd  Investment (I) = 100 Government Expenditure (G) = 200 Taxes (T) =…

Q: The consumption function of a hypothetical Economy is given as:- C = 100 + 0.6Y Calculate MPS

A: The given information is as follows:- We have the consumption function of some hypothetical economy…

Q: Investment in an economy increases by $1,000 million. Suppose marginal propensity to save is zero.…

A: # We know well that the value of multiplier is given as:- k = 1/MPS Also the multiplier is also…

Q: The MPS is 1 + MPC. O the change in saving divided by the change in income. total saving divided by…

A: Marginal propensity to save (MPS): - it is a fraction of the change in income that is being saved.

Q: What would an increase in planned investment increase in real GDP, but an unplanned increase…

A: Real GDP(RGDP) measures the value of all final goods(g) and services(s) produced within a…

Q: Explain what the consumption function shows, and describe what is held constant along the…

A: The consumption function is an important concept of national income. It relates to the consumption…

Q: Assume the following consumption schedule: C=20+0.9Y, where C is consumption and Y is disposable…

A: The given consumption schedule is C=20+0.9Y Where C= Consumption Y is the disposable income The…

Q: Answer the questions on the basis of the information given in the following diagram: Guideline…

A: Marginal propensity to consume is the ratio of change in consumption and change in income level.

Q: Assume a consumption function that takes on the following algebraic form: C = 100 + 0.8 Y. Assume…

A: Assume a consumption function that takes on the following algebraic form: C = 100 + 0.8 Y. Assume…

Q: In a simple economy (assume there are no taxes, thus Y is disposable income), the consumption…

A: Here we can find the GDP which calculate the production of goods and services in the economy, so…

Q: consumption function of a hypothetical Economy is given as:- C = 100 + 0.6Y Calculate the value of…

A: Marginal Propensity to consume alludes to the rate change in utilization for each one dollar of…

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: We use the following terminology in this part: aggregate income Y and disposable income Ya (= Y –T),…

A: AD is an economic estimation of the aggregate sum of demand for every single completed service and…

Q: Assume a closed economy where the level of investment  is 300 and savings function is s = -30+ 0.15y…

A: Given: The saving function is: S = -30 + 0.15y The level of investment is = 300 To Find: The…

Q: Suppose that the marginal propensity to save is ds = 0.29 dy (in billions of dollars) and that…

A: Given: dSdy=0.29To find the national consumption function:dCdy=1-dSdy

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…

Q: Assume aggregate consumer spending equals $1,500 when aggregate disposable income is zero, and when…

A: The aggregate consumption function is given below C=c0+c1YD C = 1500, when Yd = 0 if Yd increase to…

Q: Suppose a closed economy with no government spending or taxing is capable of producing an output of…

A: Consumption is the sum of Autonomous consumption and induced consumption. Autonomous consumption…

Q: We use the following terminology in this part: aggregate income Y and disposable income Ya (= Y –T),…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Suppose a closed economy has an intended investment of 200 and an aggregate consumption function…

A: In a closed economy, Y=C+I+G.  Given: Intended investment =200 Consumption function: C = 250 +…

Q: Suppose that a certain country has an MPC of .9 and a real GDP of $400 billion. If its investment…

A: The total production of good and services across the sectors of economy in a particular period of…

Q: Refer to the figure at right. The equilibrium level of real GDP will occur   A. at point A.   B. to…

A: The gross domestic product (real GDP) is the adjusted inflation rate that reflects the value of all…

Q: Suppose that for a particular economy and period, investment was equal to 200 , government…

A: here we calculate the change in equilibrium income while change in taxation  by using the given…

Q: Which of the following is not a valid expenditure function? UP UP, None of these can be expenditure…

A: An expenditure function gives the lowest level of expenditure to be incurred by a consumer to attain…

Q: Marginal propensity to save is 2 times that of Marginal propensity to consume Calculate the value…

A: The information being given is:- It's given that the value of MPS is 2 times the value of MPC so:-…

Q: Consider an economy in which the only taxes collected by the government are lump-sum (the tax bills…

A: Tax rate will influence the disposable income of households.

Q: Why is saving called a leakage? Why is planned investment called an injection? Why must saving equal…

A: Saving is a leakage because it is a leakage from the flow of aggregate consumption expenditure…

Q: Find the value of MPC if MPS is 0.4.

A: Given: Marginal propensity to save = 0.4