Q.2.1 Calculate the level of autonomous spending in this economy. Q.2.2 Calculate the size of the multiplier (Note: Round your answer to two decimal places) Q.2.3 Calculate the equilibrium level of income

Q: Graph the following situation. Suppose the economy is in a recessionary gap and GDP is in…

A: A multiplier is a term used in economics to describe an economic factor that, when increased or…

Q: In the income multiplier is equal to 4, then a $25 initial increase in government spending leads to…

A: The public authority spending multiplier impact is clear when a steady increase in spending prompts…

Q: You are given the following information on the macroeconomy: Consumption:                 200 +…

A: Income (Y) can be calculated as follows. Equilibrium income is $2,125. From the above calculation…

Q: If the MPC in an economy is 0.80, government could close a recessionary expenditure gap of $80…

A: A negative output gap also known as recessionary output gap is when the long run output exceeds the…

Q: The relationship between changes in spending and Real GDP without price increase is: a. Economic…

A: Real GDP is the value of goods and services produced in the economy in a given time period excluding…

Q: Suppose that consumption is 70 million and disposable income is 350 and that the economy is…

A: A recessionary GDP gap refers to when natural GDP is higher than actual GDP. This implies actual GDP…

Q: If consumption is C=100+0.75Yd Taxes is T=50+0.5Y Export is X=200 Import is M=50+0.25Y…

A: The equilibrium is established where: Y= C+I+G+X-M

Q: You are given the following information about a closed economy with no government: Consumption =…

A: Given that, the economy is closed, and there is no government to operate the economy. Consumption an…

Q: You are given the following information about a closed economy with no government: Consumption =…

A: Autonomous spending means that it is not dependent on the level of income(Y). Therefore, we put it…

Q: Assume that the MPC is 0.70.  What is the income multiplier?   Question 46 options:   a)  0.3   b)…

A: MPC + MPS = 1 Where MPC is the marginal propensity to consumer  MPS is the marginal propensity to…

Q: Use the following information on economy X to answer the questions below. Consumption function: C =…

A: Multiplier is a factor by which income changes when there has been an autonomous change in spending.

Q: 3. In a given economy potential GDP is at $4,000,000. If equilibrium/actual GDP is $3,200,000,…

A: potential output economy get when economy operates at full employment situation .  Full employment…

Q: Suppose that autonomous consumption (a) is 300, private investment spending(I) is 420, government…

A: In the Keynesian model, the aggregate expenditures or national income can be determined by using the…

Q: suppose the government wishes to eliminate a recessionary GAP of 100 billion and the  MPC is .75.…

A: Recessionary gap is when the country's GDP is lower than its GDP at full employment level.…

Q: In a private closed economy where MPC= 0.8, if consumers reduce their spending by $20 billion and…

A: The macroeconomic equilibrium in an economy is determined by the aggregate demand and aggregate…

Q: Use the following information on economy X to answer the questions below. Consumption function: C =…

A:

Q: Consider an economy in which autonomous consumption, planned autonomous investment, autonomous…

A: Given, Autonomous consumer spending =$3,000  Investment = Ip = $5,000 Government spending = G =…

Q: In the economy of Keynesian Island, autonomous consumption expenditure is $50 million, and the…

A: It is given that the autonomous consumption in the Keynesian land is $50 million. This means that…

Q: Equilibrium output is 1000, MPC is 1/2 and taxes are zero. Government spending is 20 and net exports…

A: The income equation is given as Y = C+I+G+NX Here consumption is 1/2*Y= MPC which is 1/2*1000= 500…

Q: The Nottinghamshire Research Observatory in England calculated that students who attend Nottingham…

A: Student spending multiplier = Total impact of their spending on the local economy / Initial total…

Q: Based on the economic data of a country presented in the following table, complete the table!…

A: The entire quantity of demand for all finished products and services generated in an economy is…

Q: Use the following information on economy X to answer the questions below. Consumption function: C…

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

Q: Calculate MPC, MPS and the Multiplier if consumption expenditure increases by $4,000 as a result of…

A: MPS+MPC =1

Q: What happens to aggregate output if both taxes and government spending are lowered by $300 billion…

A: A multiplier is a proportionality factor that measures how much endogenous variable changes in…

Q: In the economy of Keynesian Island, autonomous consumption expenditure is $50 million, and the…

A: Gross domestic product (GDP) refers to the value of all final good and services that produced within…

Q: Explain the concept of the spending multiplier.

A: Spending Multiplier = 1/MPS or 1/(1-MPC)Where,MPS = marginal propensity to save that is the…

Q: Q.4.1 Use the following information on economy X to answer the questions below. Consumption…

A: At equilibrium, Y = aggregate expenditure  Y= consumption + investment + government + exports -…

Q: Suppose that there is an autonomous increase in investment spending of $20 billion and the MPC is…

A: Marginal propensity to consume is the change in consumption spending with change in disposable…

Q: GDP, Billions Consumption, Billions $100 $120 200 200 300 280 400 360 500 440 600 520 700 600 c. Now…

A: Given the proportional tax = 10% We are required to find the new consumption schedule, MPC, and…

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: In a certain economy, when income is $200, consumer spending is $145.  The value of the multiplier…

A: The marginal propensity to consume is the proportion of the disposable income that a person wants to…

Q: What is the difference between tax cuts imposed on higher-income households compared with lower- and…

A: The tax cut leads to increases the disposable income of the people. In general, the tax rate is…

Q: If changes to expenditures include consumption at $2000, investment at $600, government spending at…

A: Here, given information is: Consumption: 2000 Investment: 600 Government spending: 500 Exports: 100…

Q: The equilibrium level of output for an economy is given as R2420m, with autonomous spending of…

A: The current level of output is R2420m The autonomous spending is R968m…

Q: What will an increase in the tax rate cause? A decrease in the spending A multipliers An increase in…

A: Multiplier effect is shows the multiplication of one varible due to change in another varible

Q: Given the following information, S = -200 + 3Y…

A: S=-200+3Y I=100  Find: a) National Income equilibrium by using the Leakage-Injection b) The value of…

Q: Government expenditures represents one of the injections of expenditure. Explain how an increase in…

A: In the circular flow of economy, leakages reduce the flow of income in the economy and injections…

Q: In a private closed economy where MPC = 0.90, if consumers reduce their spending by $5 billion and…

A: Given the MPC = 0.90 Reduction in consumption = $5 billion Decrease in investment  = $4 billion

Q: an open economy with government, the marginal propensity to consume is 0.67, the tax rate is 0.2 and…

A: Answer; Multiplier is 1.4 answer

Q: What is the spending multiplier for the north laurisian econom

A: According to research from 2020,Louisiana , the industry contributed $73 billion to the state's GDP…

Q: What will an increase in the tax rate cause? A decrease in the spending A multipliers An increase in…

A: In an economy, marginal propensity to tax refers to the proportion of income that is taken out to…

Q: Suppose the president is successful in passing a $10 billion tax increase. Assume that taxes are…

A: Tax multiplier is a fiscal multiplier which measures the multiples of change in gross domestic…

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

A: (i) The tax imposed is: 0.2Y The consumption function is: C = A + bY     = 300 + 0.5Y

Q: • Tax rate = 12.5% %3D • Government expenditure = 100 Y 1. The new aggregate expenditure function is…

A: Given Information Tax Rate = 12.5%Government Expenditure = 100

Q: Describe the volatility of government spending and net exports relative to that of GDP and suggest…

A: The components of the GDP here, that is the government spending & the exports of goods &…