onsider the economy described by the following equations:   C = 1,600 + 0.9 (Y – T) I p = 800 G = 1,600 NX = 200 T = 1,600 Y* = 29,000 a.  Complete the table shown below to find short-run equilibrium output. Consider possible values for short-run equilibrium output as they are given in the table below. Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers.   OutputY Planned aggregate expenditure (PAE) Y – PAE Y = PAE? 27,200       (Click to select)   Yes   No  27,400       (Click to select)   No   Yes  27,600       (Click to select)   No   Yes  27,800       (Click to select)   No   Yes  28,000       (Click to select)   No   Yes           b. Short-run level of equilibrium output:             c. What is the output gap for this economy?

Question
onsider the economy described by the following equations:
 
C = 1,600 + 0.9 (Y – T)
I p = 800
G = 1,600
NX = 200
T = 1,600
Y* = 29,000


a.  Complete the table shown below to find short-run equilibrium output. Consider possible values for short-run equilibrium output as they are given in the table below.

Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers.

 

OutputY Planned aggregate expenditure (PAE) Y – PAE Y PAE?
27,200       (Click to select)   Yes   No 
27,400       (Click to select)   No   Yes 
27,600       (Click to select)   No   Yes 
27,800       (Click to select)   No   Yes 
28,000       (Click to select)   No   Yes 

        
b. Short-run level of equilibrium output:   
        
c. What is the output gap for this economy?
       
Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. The actual unemployment rate should be rounded to two decimal places.
      
Output gap:    where Y* = 29,000

If the natural rate of unemployment is 5 percent, what is the actual unemployment rate for this economy (use Okun’s law given Y* = 29,000).
    
Actual unemployment rate  %

 
 
 
 
 
 
 
 
 

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Economics

Other

Aggregate Demand

Related Economics Q&A

Find answers to questions asked by students like you.

Q: Income elasticity of demand measures the responsiveness of demand to changes in income. Explain what...

A: When consumers enter the market, their behavior and demand towards different commodities vary due to...

Q: Given the import function, Z = 300 + 2/3Y, which of the following statements iscorrect? choose the c...

A: An individual uses his income either spending it on consuming commodities or he can save this money ...

Q: The equilibrium quantity of labor and the equilibrium wage level decrease when: a) labor demand shif...

A: Answer to the question is as follows :

Q: Charlie Co. sells pastries and its production and cost table is given below. A worker costs $100 a d...

A: Marginal cost is the additional cost incurred in order to produce one additional unit of output. 

Q: Brit-Brick is a company that produces bricks and cement in the UK. Their largest consumer is ConstrU...

A: Given  Utility Function  U(x,y) = x4/5y1/5 To Find Marginal Utility of x take partial derivative wit...

Q: Which of the following is an investment? Select one: a. the purchase of a share of stock by a hou...

A: Which of the following is an investment? Select one: a. the purchase of a share of stock by a hou...

Q: Using your knowledge and understanding of supply and demand analysis to graph the following and expl...

A: Answer to the question is as follows : 

Q: Which of the following concepts of equilibrium in game theory always exists under the assumption of ...

A: We are going to use game theoretic concepts to answer this question.  

Q: 70. In a perfectly competitive market, industry demand is given by Q = 1000 – 20P. The typical firm’...

A: In a competitive industry there are large number of firms producing identical products thus each fir...

Q: Strikes across a wide range of industries in South Africa in the first half of 2020can be illustrate...

A: The aggregate demand is the summation of the demand from all the economic agents such as the househo...

Q: 2. Zulaikha and Ker Xin went to a shop to buy nice. Zulaikha wanted to buy 10kg of rice and Ker Xin ...

A: Price elasticity of demand refers to the responsiveness of the quantity demand due to change in the ...

Q: Which of the following statements about Fiscal Policy is INCORRECT? choose the correct answer(a) In ...

A: Fiscal policy is independently implemented or used by the government to make changes in the market c...

Q: Eleanor spends all of her money on comic books and donuts. In 2012, she earned $15.00 per hour, the ...

A: x- comic book y- donut Budget constraint: 5x + 3y = 15

Q: Solve the attachment

A: The monetary policy is implemented using the tools of interest rates, open market operations, and ch...

Q: Question 13.13.   If monopolistically competitive firms in an industry are making an economic profit...

A: Monopolistic competition(MC) is a structure of the market which have elements of both a competitive ...

Q: Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run comp...

A: For the equilibrium price & quantity under perfect competition:

Q: 68. In a perfectly competitive market, industry demand is given by Q = 1000 – 20P. The typical firm’...

A: Answer to the question is as follows :

Q: Question attahed in image

A: The aggregate demand curve is a curve which shows a negative relationship between the price level an...

Q: number 2 only

A:   Given : P= 0.55 per unit Fixed expenses = 85000 per year Variable cost = 0 ( assumption , since it...

Q: if the change in the price is 10percent and the value of elasticity is 0.5 then calculate how much q...

A: Given information, Percentage change in price: 10 The value of elasticity: 0.5 To find: percentage...

Q: If the central bank decreases the amount of reserves banks are required to hold from 20% to 10%, the...

A: In a market, the fluctuation in money is managed by the central bank, and it has rights to make chan...

Q: According to macroeconomic theory, evidence that high unemployment may be accompanied by low inflati...

A: The macroeconomic theories indulge in bringing up new and non-used concepts of the economy at a larg...

Q: If the inflation rate is 6% and Susan receives a 6% increase in income, then, overthe year, Susan’s:...

A: The market value of an individual's wage money is known as nominal income and the purchasing of this...

Q: The period of time from 1,000,000 B.C. to 1300 A.D. was a period of Select one: O a. rapid and susta...

A: Rapid and sustained economic growth - When economies grow at very high rate and the growth is causin...

Q: Explain, with the aid of a graph, the demand‐pull inflation. In your answer, consider the following:...

A: Inflation is defined as an increase in the general price level of an economy. The main causes of inf...

Q: onsider a short run production function q = cL+K where the value for c =: sing L units of labour and...

A: Returns to scale measures the proportionate change in output if all inputs are changed by the same f...

Q: A multi-plex theatre area is experiencing a decline in the number of tickets sold, falling revenues,...

A: Click to see the answer

Q: Explain, with the aid of a graph, the effect on the rand/dollar exchange rate and the equilibrium qu...

A: A value of a currency depends on the demand and supply of the currency. There exist a direct relatio...

Q: (a) Why does the labour demand curve slope downwards? (b) A garment factory’s production function is...

A: a) Downward sloping of labor demand curve can be explained with the law of diminishing returns. Hiri...

Q: C = 450 + 0.4Y I = 350G = 150X = 70Z = 35 + 0.1Y T = 0.15YYf = 1550Calculate the tax revenue to the ...

A: Answer: Given: C=450+0.4YI=350G=150X=70Z=35+0.1YT=0.15YYf=1550 Calculation: (1). To calculate the ta...

Q: An increase of R5 billion in income in a macroeconomy leads to an increase in R3billion in consumpti...

A: Answer to the question is as follows:

Q: 99. In Macroland, a country that operates according to Okun's law, real GDP is $9.6 trillion, the ac...

A: When the economy is below full employment, the actual rate of unemployment is more than the natural ...

Q: beer at the same price per can to all customers. The following graph shows the marginal cost (MC), m...

A: A monopoly is a sole producer selling a good thus having maximum market power thus acting as a price...

Q: Explain two ways policymakers respond to the inefficiencies of monopolists

A: A monopolist maximize profit by producing at level of output where MR = MC and charging the maximum ...

Q: Question 19.19.  A state government wants to increase the taxes on cigarettes to increase tax revenu...

A: Taxes are the required payments to the government without expecting any direct return or profit to t...

Q: 4. Consider the following game. There are four distinct glasses of wine on a table: three are red wi...

A:   Red white White 0,0 1000,1000 Red 1000,1000 0,0

Q: Solve the attachment

A: Constrained choice happens when a financial(economic) agents must decide the ideal combination of de...

Q: Learning Activity 8.1 Question 1 Let’s assume that a country in the Caribbean reports the following ...

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...

Q: Consider two treatments. Treatment 1 saves one year of life at a cost of $10,000. Treatment 2 saves ...

A:   "Since you have asked multiple questions, we will solve the first question for you. If you want an...

Q: Case Study   Microsoft in India Microsoft made its name by building two monopolies, its Windows oper...

A: Following are the steps taken by Microsoft in developing products customized according to the Indian...

Q: Is a monopoly always undesirable? With a diagram.

A: A monopoly is a market condition that is characterized by the presence of a single seller in the mar...

Q: Is it possible for total utility to increase while marginal utility diminishes? Explain

A: Total utility It is the sum of satisfaction attained by consumption of multiple units of a commodity...

Q: Consider the local cable company, a natural monopoly. The following graph shows the monthly demand c...

A: A monopoly is a sole producer of a good thus acting as a price maker as they are having maximum mark...