Question 1 What is the accelerator effect Explain the difference between the accelerator and the multiplier. Given that Country X has a nominal GDP of $100,000 and its real GDP is $45,000, calculate the GDP deflator
Q: i. What is the accelerator effect ii. Explain the difference between the accelerator and the…
A: The circular flow of the economy represents the flow of money, goods and services in the economy.…
Q: If an increase in investment spending of $50 million by Amgen, a biomedical company, results in a…
A: Expenditure multiplier shows the effect of an initial increase in autonomous spending on total…
Q: Consider a hypothetical economy in which households spend $0.80 of each additional dollar they earn…
A: The multiplier (k) manifests the effect of an increment in government expenditure on the quantity of…
Q: Exhibit 10-3 Disposable Income Yd Consumption C $2,000 $2,040 2,100 2,120 2,200 2,200 2,300…
A: The multiplier is a measure of the amount by which the equilibrium level of income changes due to a…
Q: If the MPC were equal to zero, the expenditure multiplier would be * a. Less than zero b. zero c.…
A: Marginal propensity to consume (MPC) measures the change in consumption due to change in disposable…
Q: Given the Income and consumption data shown in the table below, what is the spending multiplier?
A: The spending multiplier indicates the effect of changes in the spending in a nation on the national…
Q: 2. The multiplier effect of a change in government purchases Consider a hypothetical closed economy…
A: Given, This is a closed economy. Household Spend = $0.70 for every additional dollar. Savings =…
Q: Is the relationship between changes in spending and changes in real GDP in the multiplier effect a…
A: The multiplier impact alludes to any adjustments in shopper spending that outcome…
Q: .Use the multiplier applicable to export,to explain how a100–billion decline in demand for export…
A: Export is the selling the commodities in the foreign market manufactured within the country’s…
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 solution you've provided is incorrect. Export is autonomous and not dependent on output (Y).…
Q: Consider a hypothetical economy in which households spend $0.80 of each additional dollar they earn…
A: According to the given information, MPC (marginal propensity to consume) is 0.8 and MPS (marginal…
Q: If the economy is currently at Q1 at $400 billion. If the economy is currently at Q3 $2000 billion…
A:
Q: Question 52 ( Which of the following combination will have the highest multiplier? Mpc - 0.90 t=…
A: The economies tend to have various entities, which are in the form of households, firms, investors,…
Q: Suppose that the U.S. government increases its expenditure on highways and bridges by $100 billion.…
A: When the government increases its expenditure on bridges and highways, it will increase the…
Q: An economy has no imports and no income taxes, MPC is 0.9, and real GDP is $200 billion. Businesses…
A: Marginal Propensity to consume(MPC)=0.9 Real GDP=$200)Billion Increase in Investmnet=$10Billion…
Q: A tax rebate that returns a certain amount of money to taxpayers can have a total effect on the…
A: Amount = $2000 spending = 70 %
Q: 6. The multiplier effect Consider a hypothetical economy. Households spend $0.60 of each additional…
A: The multiplier can be calculated as follows: Multiplier=1MPS=10.4=2.5 Thus, the multiplier for…
Q: YAS 742 + 15P – 28Poil YAD = 478 – 45P+ 18G Suppose initially, the Poil = $93 per barrel and…
A: Answer- "Thank you for submitting the question .But, we are authorized to solve only 3 sub…
Q: 22. Suppose economists observe that an increase in government spending of $10 billion raises the…
A: Solution - Given - Government spending =$10 billion Demand for Goods and service = $50 billion We…
Q: 6. The multiplier effect of a change in government purchases Consider a hypothetical closed economy…
A: Since we only answer up to 3 sub-parts we will answer the first 3. Please resubmit the question…
Q: 9. What conclusion can you draw about the effect of APS and APC on Income multiplier? Which age…
A: APS stands for average propensity to save it measures the average amount saved. While APC stands for…
Q: Refer to the information provided in Figure below to answer the question that follow. AE2 AE, B…
A: Expenditure multiplier refers to the multiplier that shows that what impact of change in autonomous…
Q: 3. The spending multiplier effect Consider a hypothetical economy. Households spend $0.50 of each…
A: Households spend $0.50 of each additional dollar they earn It means MPC is 0.50…
Q: Suppose that Kim K decides to spend $30,000 on an American‑made purse instead of donating it to…
A: The GDP multiplier indicates the amount of change in eth GDP of the economy which happens due to the…
Q: Question 1. Explain why the Aggregate Demand curve is downward sloping . 2. Explain why the…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: YAS = 742 + 15P - 28 Poil YAD = = 478 - 45P+ 18G Suppose initially, the Poil = $93 per barrel and…
A: Answer - "Thank you for submitting the question. But, we are authorized to solve only 3 subparts.…
Q: Suppose that Kim K decides to spend $30,000 on an American-made purse instead of donating it to…
A: In terms of GDP, the multiplier effect causes increase in total output to be greater than the…
Q: 3. When the following event occurs, the change in Real GDP = Event: The government increases its…
A: here we calculate the change in Real GDP due to change in government expenditure increases so ,…
Q: What do we mean when we talk about the export base of a region? How does an increase in the export…
A: The export base hypothesis says that external demand for the goods of export industries determines…
Q: 10. The "Multiplier Effect" in economics states that when $X is initially spent in a locale to boost…
A: Initial investment of 2 billion 9 billion in total revenue
Q: EOC ЕОC 8.13 Explain why the multiplier effect of an increase in consumption spending of $100…
A: A multiplier is a term used in economics to describe an economic element that, when raised or…
Q: please show how you get M=0.5
A: Import is the process of buying products and services from foreign countries for consumption…
Q: 4. The multiplier effect of a change in government purchases Consider a hypothetical closed economy…
A: The multiplier effect is the theory that government spending to stimulate the economy causes an…
Q: Autonomous consumption = R100m Investment spending = R300m Government spending = R200 million…
A: since you have asked multiple questions and according to our policy we can only solve the first part…
Q: Fill in the blanks with the number that corresponds to the correct word or phrase n the word bank 1.…
A: Disclaimer : as you posted multipart question we are supposed to solve only the first 3 as per the…
Q: What will be the impact on the spending multiplier if the marginal propensity to save (MPS)…
A: Marginal propensity to save (MPS) is the ability to save the increased income instead of spending on…
Q: YAS = 742 + 15P – 28Poil YAD - 478 – 45P + 18G Suppose initially, the Poil = $93 per barrel and…
A: Given: YAS=742+15P-28POilYAD=478-45P+18G Poil=$93 per barrel Government spending=$630 Note: Due to…
Q: Explain the basic idea of the expenditure multiplier and the role consumers play.
A: Keynesian economic science may be a economics theory of total defrayal within the economy and its…
Question 1
- What is the accelerator effect
- Explain the difference between the accelerator and the multiplier.
- Given that Country X has a nominal
GDP of $100,000 and its real GDP is $45,000, calculate the GDP deflator.
Step by step
Solved in 3 steps with 2 images
- i. What is the accelerator effectii. Explain the difference between the accelerator and the multiplier.iii. Given that Country X has a nominal GDP of $100,000 and its real GDP is $45,000, calculate the GDP deflator.Define and Derive Multiplier and Accelerator.Exhibit 10-3 DisposableIncomeYd ConsumptionC $2,000 $2,040 2,100 2,120 2,200 2,200 2,300 2,280 2,400 2,360 Refer to Exhibit 10-3. What is the multiplier?
- During 2019, a country reported that its real GDP increased by $3.0 billion. The multiplier for this economy is known to be equal to 10.Which of the following might have caused the increase in real GDP? Question 12Answer a. Exports increased by $0.3 billion. b. Investment decreased by $0.3 billion. c. Exports decreased by $0.3 billion. d. Imports increased by $0.3 billion. e. Government expenditure on goods and services increased by $3 billion.With following values, c = 0,7, t = 0,41 and m = 0,86 use the multiplier and calculate the potential impact of the President’s R791 billion infrastructure investment plan on the value of GDP in 2021.If an increase in investment spending of $50 million by Amgen, a biomedical company, results in a $400 million increase in equilibrium real GDP, then what is the expenditure multiplier? Select one: a. the multiplier is 0.125. b. the multiplier is 3.5. c. the multiplier is 8. d. the multiplier is 50.
- Find the value of change in investment if the value of multiplier is 5 and the change in national income is $1000 millionIn an economy investment increases by 120 billion. The value of multiplier is 4. Calculate MPC.Aggregate expenditure is 790. Income is 730 and consumption is 720, income increases to 750 and consumption increases to 736. There is an increase in consumer spending of 3. ( Please specifically respond the What will the new level of aggregate expenditure be ) What will the MPC be What will the MPS be What will the multiplier be What will the new level of aggregate expenditure be
- 1) Determine the value of the multiplier for this economy, and find the equilibrium value of Y.An economy has a fixed price level, no imports and no income taxes. MPC is 0.75 and real GDP is $150 billion. Government increases expenditures by $5 billion. Calculate the: Multiplier and interpret the meaning of the multiplier. Change in real GDP and new level of real GDP.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 C) 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). D) What is the value of the multiplier? E) Comment on the results in part (c) and (d).