Question 5/ 25 If government spending decreased by $500. Given that c= 100+0.75y and the initial income is $5000, the new equilibrium income is: 1. OS7000 2. Os1600 3. O$3000 4. Os6600
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Q: Consumption function: C = 250 + 0.8Y Investment spending: I = 150 Government spending: G = 500…
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A: Answer: Hence income i.e I = 600
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Q: Use the following equations for exercises 16–18. C = $100 + .8Y I = $200 G = $250 X = $100 – .2Y 16.…
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Q: Assume the following model of the expenditure sector: S=C+I+G+Nx TR=100 C=420+(4/5)YD I=160 G=180…
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A: Autonomous Consumption = 100 Investment Spending = 300 Government Spending = 200 Exports = 150…
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Q: giving the following information C= 20+4/5Yd T=5+1/5Y I=18 and G=20 find out equilibrium levels of…
A: It is given to us that C=20+4/5yd T=5+1/5Y I = 18 g=20
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Q: Consumption function: C = 250 + 0.8Y Investment spending: I = 150 Government spending: G = 500…
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Q: Consumption function: C = 250 + 0.8Y Investment spending: I 150 Government spending: G = 500 Exports…
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Q: ider an economy that is described by the following: C = 500 + 0.75Yd I = 100 G = 100 T = 100…
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- Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300 million with the proportion of an increase in income that is spent on consumption is 0.5. An induced tax of 20% is imposed by the country. The amount of investment is RM250 million, and the amount of government spending is RM150 million. A) explain what would happen to the national income equilibrium if the invesment changes by rm100 millionY=C0+C1(Y-T)+I+G, C0=100 dollars, C1=0.8 (1) Suppose that tax collection (t) increases as much as 200 dollars. What would be its effect on national income? (2) Suppose that government expenditure (G) and tax collection (T) increases as much as 200 dollars, respectively. What would be its effect on national income?2. Given:C = 250 + 0.8 Y I = 150G = 300TR = 100NX = 100 t =0.25i)Find the equilibrium level of income.(ii)Suppose, b10, G falls to 100 and NX falls to 10. How much TR should the government increase to have the same level of equilibrium income as in part i)?(iii)In determining the required change in TR in part ii), which multiplier did you use and why? (Hint: keep in mind the consumption tendency households may have under the COVID 19 situation in selecting the multiplier).(iv)Draw a graph to show the appropriate changes between part i) and part ii).(v)Give an example related to current Bangladeshi situation where the government may follow a 'Transfer Promoting Policy' instead of a 'Growth Promoting Policy' in determining who gets the transfer payment.(vi)Instead of paying transfer (TR) if the government were to increase government spending (G), what type of crowding out would you expect? Briefly explain.(vii) As we have observed recently that, a lot of the assistance from the…
- Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300 million with the proportion of an increase in income that is spent on consumption is 05. An induced tax of 20% is imposed by the country. The amount of investment is RM250 million, and the amount of government spending is RM150 million. A) calculate the national income equilibrium.27. Given this diagram, if Investment spending were to be reduced to 10, what would be the resulting equilibrium income? 28. Given this diagram, if G (government purchases of goods and services) were increased to 35, what would be the resulting equilibrium level of income?Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300 million with the proportion of an increase in income that is spent on consumption is 0.5. An induced tax of 20% is imposed by the country. The amount of investment is RM250 million, and the amount of government spending is RM150 million. (iii) Explain what would happen to the national income equilibrium if the investment changes by RM100 million.
- 18. What will be the level of consumption spending at an income level of 36? a) 30 b) 24 c) 28 d) 16 e) 8Suppose we have the following consumption function in an economy C = 2000 + 0.9YD. Howmuch government spending has to be increased in order to have an increase in equilibriumoutput equal to 1000? a. 100.b. 200.c. 250.d. 1000.e. none of these.f. do not have adequate information.Given thatG= 201= 35C = 0.9Ya + 70T= 0.2Y + 25Where, G, I, C, T and Ya are planned government expenditure and planned investment autonomous andconsumption expenditure and tax respectively.Calculate the equilibrium level of national income.
- Assume the following model of the expenditure sector: S=C+I+G+Nx TR=100 C=420+(4/5)YD I=160 G=180 Nx=-40 YD=Y+TR-TA TA=(1/6)Y Assume you increase both government purchases (G) and taxes (TA) by the same lump sum of deltaG=deltaTA=+300. Would this be sufficent to reach the full employment level of output at Y*=2700? Why or why not?ASSUME THAT A THREE SECTOR ECONOMY IN COUNTRY W. THE AMOUNT OF AUTONOMOUS CONSUMPTION IS RM 300 MILLION WITH PROPORTION OF AN INCREASE IN INCOME THAT IS SPENT ON CONSUMPTION IS 0.5. AN INDUCED TAX OF 20% IS IMPOSED BY THE COUNTRY. THE AMOUNT OF IS RM 250 MILLION AND THE AMOUNT OF GOVERNMENT SPENDING IS RM 150 MILLION. CALCULATE THE NATIONAL EQUILIBRIUM INCOME.Suppose the consumption function is given by C(Y)=60+0.8(Y-T) where Y represents output and T stands for net taxes. Suppose further that the level of investment, I, is 400, the level of government expenditure, G, is 300, and net taxes, T, are 200. What is the equilibrium level of output in this economy? a. 1720 b. 3000 c. 1590 d. 720