Question: Use The Following Information To Work Problems 4 To 6. In An Economy With No Exports And No Imports, Autonomous... Use the following information to work Problems 4 to 6. In an economy with no exports and no imports, autonomous consumption is $1 trillion, the marginal propensity to consume is 0.8, investment is $5 trillion, and government expenditure on goods and services is $4 trillion. Taxes are $4 trillion and do not vary with real GDP. 4. If real GDP is $30 trillion, calculate disposable income, consumption expenditure, and aggregate planned expenditure. What is equilibrium expenditure? 5. If real GDP is $30 trillion, explain the process that takes the economy to equilibrium expenditure. If real GDP is $40 trillion, explain the process that takes the economy to equilibrium expenditure. 5. If investment increases by $0.5 trillion, calculate the change in equilibrium expenditure and the multiplier.

Question: Use The Following Information To Work Problems 4 To 6. In An Economy With No Exports And No Imports, Autonomous... Use the following information to work Problems 4 to 6. In an economy with no exports and no imports, autonomous consumption is $1 trillion, the marginal propensity to consume is 0.8, investment is $5 trillion, and government expenditure on goods and services is $4 trillion. Taxes are $4 trillion and do not vary with real GDP. 4. If real GDP is $30 trillion, calculate disposable income, consumption expenditure, and aggregate planned expenditure. What is equilibrium expenditure? 5. If real GDP is $30 trillion, explain the process that takes the economy to equilibrium expenditure. If real GDP is $40 trillion, explain the process that takes the economy to equilibrium expenditure. 5. If investment increases by $0.5 trillion, calculate the change in equilibrium expenditure and the multiplier.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter20: Exchange Rates And The Macroeconomy

Section: Chapter Questions

Problem 3TY

See similar textbooks

Similar questions

Suppose that the following equations describe the economy of the country of the Philippines.C= 500 + 0.8 (Y – T), I= 200, G= 300, NX= 50, T= 200, Yf= 5000; where C=consumption level, I=investment, G=government expenditures, NX=net exports, T=taxes and Yf=full employment output/income.Use this information to find each of the following:4.1. Investment, government and tax multiplier.4.2. Equilibrium output/income.4.3. The output gap.4.4. By how much would government expenditures have to change to eliminate the output gap?
1. Answer the following: A) In 2011 the United States economy had a GDP of $14,991 billion according to the United Nations. If consumption was $10,729 billion, government spending was $2,594 billion, and net exports was -$568 billion, how much was investment spending? B) In 2011 the United States economy had a GDI (Gross Domestic Income) of approximately $13,548 billion according to the Bureau of Economic Analysis. If wages were $8,340 billion, interest payments were $516 billion, and rent was $430 billion, approximately how much was remaining for profit?
Only typed answer and please don't use chatgpt Why will temporary tax increase be insignificant in reducing consumption expenditures by the amount expected a. Because viewed the tax increase as permanent. b. Because people choose to increase their savings. C become people viewed taco increases temporarily d. Consumption expenditure are not related to level of taxtation
Only typed answer Explain why the multiplier falls when taxes depend on income. .1 Assume the following for the economy of a country: a. Consumption function: C = 60 + 0.75Yd b. Investment: I = 75 c. Government spending: G = 45 d. Net taxes: T = - 25 + 0.2Y e. Disposable income: Yd. = Y - T f. Equilibrium: Y = C + I + G Solve for equilibrium income. How much does the government collect in net taxes when the economy is in equilibrium? What is the government’s budget deficit or surplus?
What is the relative importance of consumption spending (C) in aggreagte demand and some factors that affect it? What is the relative importance of investment spending (I) in aggreagte demand and some factors that affect it? What is the relative importance of government spending (G) in aggreagte demand and some factors that affect it? What is the relative importance of Net Export (NX) (Net Export = spending on exports (X) - imports (M)) in aggreagte demand and some factors that affect it?
1. Suppose a closed economy hasnational income of $50 million,Investment of $2 million,Inflation rate of 5%, net tax rateof 15% and a budget surplus of$4 million. Find value of government purchases (G).
3@ An economy has neither imports nor income taxes. The MPC is 0.75 and the real GDP is $120 billion. The government increases expenditures by $4 billion. The multiplier is _____ and the change in real GDP from the increase in government expenditures is _____ billion.
In the economy of Kwartengland, the following figures are given for economic activity which was undertaken in 2013. All the figures are million Ghana Cedis Consumption Expenditure = 1000 + 0.8 YD Investment Spending= 600 Government Expenditure = 2450 Personal Taxes= 100 Exports= 100 Imports= 150 1. Calculate the equilibrium real GDP for the economy 2. What is the level of consumption at the equilibrium level of GDP 3. Calculate the investment and tax multipliers 4. By how much should exports change if government wishes to increase real GDP by 1000?
Trace out the effect of increase in government expenditure on equilibrium output and the interest rate when government finance its expenditure through (a) open market operation, (b) increase in tax rate.
Please see attachment Answer neatly Show all your work. Based on the above diagram: 1. Calculate MPC? 2. If Private Investment increases by 100, calculate the new level of NI. 3. If full-employment NI is at 3000, by how much should Government spending change? 4. What is the new NI, If 1/2 of those government expenditures are financed through taxes?
Topic: Fiscal Policy 1. A government collects $0.35 on every new dollar of income. Of the remaining $0.65 of disposable income, 20% is spent on imports, and 10% of the disposable income is saved. a. What is the marginal propensity to withdraw?b. How much of each new dollar of income is spent on domestic consumption?c. What is the spending multiplier in this economy?
The following table shows data for the economy before the decrease in saving. Suppose that the decrease in saving causes consumption to rise from $280 million to $320 million. Assume Say's law holds in this economy. Fill in the data for the economy after the decrease in saving. Before Saving Decrease After Saving Decrease Consumption (C) $280 million $320 million Investment (I) $200 million $ million Government Purchases (G) $250 million $ million Exports (EX) $500 million $500 million Imports (IM) $300 million $300 million As a result of the decrease in saving, total expenditures will .