In the Keynesian model the multiplier is equal to (4 marks) A The equilibrium level of output for a given level of aggregate expenditure. B The increase in aggregate expenditure brought about by a change in investment. C The increase in the equilibrium level of income divided by the change in autonomous expenditure. D The increase in autonomous expenditure when equilibrium income increases.

Q: An economy is in equilibrium. Find Marginal Propensity to Consume from the following: National…

A: The provided information are: National income (Y) = 2000 Autonomous consumption (a) = 400 Investment…

Q: Yo Which one of the following statements is false? A Y1 represents the equilibrium level of income.…

A: In a two-sector economy, government expenditure and net export will be both equal to zero. In…

Q: an economy where the various components of expenditure follow these equations: C = 10 + 0.8Yd I =…

A: A) Y= C+I+G+(X-M) Y= 10+0.8Yd+500+100+(300-0.1Y) Y= 10+0.8(Y - T)+500+100+(300-0.1Y) Y= 10+0.8(Y -…

Q: The marginal propensity to consume is 0.75. What will be the initial change in consumption when?…

A: The marginal propensity to consume refers to a proportionate change in consumption due to the change…

Q: Troll Island is a small island nation that recently experienced an autonomous change in aggregate…

A: Change in AE = 8 billion MPC = 0.55

Q: Suppose that autonomous consumption (a) is 200, private investment spending (I) is 340, government…

A: Given -  a = 200, I = 340, G = 300, T = 300, b = 0.8, t = 0.25

Q: Assume that the level of autonomous consumption in an economy equals 600, the level of planned…

A: "Macroeconomic equilibrium occurs at a point where aggregate supply of the economy equates the…

Q: Which of the following would not increase autonomous consumption spending? Select an answer and…

A: Disposable income refers to the income that is received by the consumer after the payment of tax. If…

Q: In an economy, autonomous consumption expenditure is $50 billion, investment is $200 billion, and…

A: "Since you have posted a question with multiple sub-parts will solve first three subpart for you.To…

Q: the two parts of the keynesian consumption function are consumption that depends on and consumption…

A: The Keynesian consumption function shows the relationship between the national income and the total…

Q: Assume a simple model with no government or foreign sector. If an increase in autonomous investment…

A: Here, it is given that change in expenditure (investment) is 100 due to which income (consumption)…

Q: An economy has the following consumption function: C=$200+0.8DI . The government budget is balanced,…

A: The equilibrium in a macroeconomic model emerges when the aggregate demand for final goods , which…

Q: The Wilson family has a disposable income of $70,000 annually. Currently, the Wilson family spends…

A: To calculate the annual consumer spending of the family.

Q: Calculate autonomous consumption expenditure from the following date about an economy which is In…

A: The economic activities in an economy includes activities by different entities. These are…

Q: The autonomous expenditure multiplier that has the highest value is:    a) the net exports…

A: multiplier is used to determine how much an initial change in the variable affect  output. . The…

Q: Consider a closed economy to which the Keynesian-cross analysis applies. Consumption is given by the…

A: A closed economy indicates that the economy is not open for trade. The economy does not trade with…

Q: If investment increases by Rs200 and, in response, equilibrium expenditure increases by Rs800 a. The…

A: An economy is alleged to be at equilibrium once mixture expenditure is capable the mixture provide…

Q: 'Investment multiplier and marginal propensity to consume are directly related to each other'. Give…

A: Introduction- The idea that any increase in public or private investment spending has a more than…

Q: Consider a closed economy to which the Keynesian-cross analysis applies. Consumption is given by the…

A: Given: C=100+0.6(Y-T) Note: Due to multiple subparts being posted, the first three subparts have…

Q: As shown in Exhibit 8-2, the marginal propensity to consume (MPC) is:

A: Consumption function can be written as -  C=a+bY, where a = autonomous consumption and b = MPC =…

Q: In the Keynesian cross, the economy is in equilibrium when planned expenditure equals actual…

A: Keynesian cross model determines equilibrium real GDP produced using aggregate expenditure and…

Q: 1. Induced consumption is:  (a) the part of consumption which is independent of the level of income.…

A: Disclaimer :- As you posted multiple questions we are supposed to solve one question only which is…

Q: The change in output following a change in autonomous expenditure is known as the: (a)  Investment…

A: The term multiplier refers to the effect by which an increase in autonomous expenditure leads to an…

Q: In the output expenditure model, the spending multiplier is (MPC is marginal propensity to consume…

A: In the output expenditure model the spending multiplier is: 1(1-MPC-MPM)

Q: Explain how the equilibrium Output is determined utilizing the Income Approach, Commonly called: The…

A: *The aggregate demand refers to the total expenditure. *The aggregate supply refers to the Income.

Q: Troll Island is a small island nation that recently experienced an autonomous change in aggregate…

A: The term “multiplier” is defined as the measure of the amount by which the equilibrium level of…

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: Which of the following is correct? When the consumption function lies above the 45-degree line,…

A: Consumption function shows the relationship between the consumption and the disposable income. The…

Q: Suppose the marginal propensity to consume equals 0.7 (i.e., c1 = 0.7). Given this information,…

A: Aggregate equilibrium in closed economy is given by , Aggregate demand = Aggregate Output  where,…

Q: According to the baseline multiplier model, aggregate consumption is a function C = co +cqY of…

A: C=c0+c1Y This function shows the relationship between consumption and income level.

Q: The multiplier (expenditure multiplier) is the ratio between which two measures? marginal propensity…

A: Multiplier: - it is a fraction that shows the magnitude of the change in national income due to a…

Q: If autonomous expenditure remains constant, and there is a decrease in the proportion of aggregate…

A: The economies are made up of various entities, who play an important role in determining the level…

Q: Troll Island is a small island nation that recently experienced an autonomous change in aggregate…

A: Marginal Propensity to Consume (MPC): It refers to the proportion of income that is spent on…

Q: Consider the multiplier model (in which the only component of expenditure that depends on income is…

A: The investments and the savings are considered to be the real factors of the economy. The…

Q: Consider an economy where the various components of expenditure follow these equations: C = 10 +…

A:

Q: Equilibrium expenditure occurs where * The aggregate expenditure curve crosses the 45-degree line…

A: The point of intersection of total output i.e., 45' line and the planned expenditure is said to be…

Q: Suppose the aggregate consumption function is represented by C = £1,000 + 0.5*YD, where YD is…

A: Given:- Consumption; C=£1000+0.5YD where; C= Consumption function YD= Disposable Income At…

Q: Consider a closed economy without government Given C =100 + 0.8 Y and I = 80 a. Derive the AD…

A: Part a: AD = Total Demand = C + I  AD = 100 + 0.8Y + 80 = 180 + 0.8Y AD FUNCTION: 180 + 0.8Y In…

Q: Assume MPC = 0.7, MPM = 0.2 and the Keynesian expenditure multiplier is 1.75, then the MPT must…

A:

Q: Keynesian cross model, assume that the consumption function

A:

Q: can you please answer strating form D to F   Given the information below, answer the questions…

A: Given C = $40 + 0.8Y             I = $30             G = $40               X – M = -$10 Initial…

Q: Assume a simple Keynesian macro model: AE = C + I      C = 100 + 0.75Y      I = 200 i) Find the…

A: For equilibrium level of income sum consumption and investment as it is equal to aggregate…

Q: Suppose that the government increases its spending by 50$. If the MPC (marginal propensity to…

A: In an economy, short run equilibrium level of output is determined at a level where aggregate demand…

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

A: The aggregate expenditure model determines the equilibrium level of real GDP using components of…

Q: Question 2: a. Discuss and graphically depict Keynes’s three conjectures about the consumption…

A: Note: Since you posted a question with multiple subparts, we will solve the first three subparts for…