Refer to the information provided in Table 8.7 below toanswer the questions that follow.Table 8.7All Figures in Billions of DollarsAggregate ConsumptionAggregate OutputPlanned Investment1002003004004501006006001008007501001,000900100Refer to Table 8.7. Planned investment equals actualinvestment atSelect one:a. all income levels.b. all income levels below $600 billion.c. all income levels above $600 billion.d. $1,000 billion.

Planned investment refers to the investment level that an economy wants to invest in a specific year…

Answered: Refer to the information provided in…

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Savings,Investment And The Financial System

Section: Chapter Questions

Problem 2QCMC

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Assumptions for all the questions: Private consumption is a function of disposable income and wealth (unless stated otherwise). Investment depends only on the real interest rate (unless stated otherwise). please present your answer using graphs and short explanations. Assume that the economy is open and that CF= 0. Assume that Y*< Yfull. Analyze the influence of the following events (analyze each event separately unless said otherwise) on the equlibrium outcomes. Use the diagrams and show the changes relative to the initial situation which you described in A. In each section show what will happen to output, real interest rate, net capital flow (CF), import surplus (IM-EX), real exchange rate, private consumption, investment and inflation rate in the short run and in the long run. a) Assume that we are in the initial situation of short-run equilibrium described above. The government decided to decrease taxes and increase bonds in order to increse household consumption. asume…
Given the following consumption function, C = 400 + 0.75YD,where C= consumption expenditure, YD = disposable income, Investment= $1200, Government spending = $1600,Exports = $500, Imports = $600, Taxes = $1200 and Potential GDP = $9000Choose corrcct optiona) Aactual output is less than potential outputb) actual output is zeroc) actual output is equal to potential outputd) actual output is higher than potential output
Consider the following NIPA data for 1Q2021 (First Quarter 20210 $ billlion) Investment: Non Residential $2,948.3 Exports $2,305.3 PCE Goods $5,183.5 Investment: Residential $1,043.7 Government Expendiures Federal $1,557.0 PCE Services $9,857.7 Imports $3,152.3 Governemnt Expenditures : State and local Goernent Expenditures $2,395.9 Change in private inventories -$90.1 2a. Compute the weights of each of PCE, GPDI, NX and GOV) in GDP 2b. Consider the following rates of change (%) for each of the above items. % change PCE 10.70% GPDI -5.00% NX -6.80% GOV 6.30%
Given the following consumption function, C = 400 + 0.75YD,where C= consumption expenditure, YD = disposable income, Investment= $1200, Government spending = $1600,Exports = $500, Imports = $600, Taxes = $1200 and Potential GDP = $9000Aactual output is less than potential outputactual output is zeroactual output is equal to potential outputactual output is higher than potential output
table below shows levels of employment, output, consumption, and saving for a private closed economy. Possible Levels of Employment, Millions Real Domestic Output,Billions Consumption,Billions Saving,Billions 40 $ 240 $ 244 -$ 4 45 260 260 0 50 280 276 4 55 300 292 8 60 320 308 12 65 340 324 16 70 360 340 20 75 380 356 24 80 400 372 28 Instructions: Enter your answers as a whole number. Using the consumption and saving data above and assuming planned investment is $16 billion, answer the following questions: a. What are saving and planned investment at the $380 billion level of domestic output? Investment = $ billion
A consumer's income in the current period is y = 100 and income in the future period is y'= 120. He or she pays lump-sum taxes t=20 in the current period and t'= 10 in the future period. The real interest rate is 0.1, or 10%, per period. (a) Determine the consumer's lifetime wealth. (b) Suppose that current and future consumptions are perfect complements for the con sumer and that he or she always wants to have equal consumption in the current and future periods. Draw the consumer's indiffer ence curves. (c) Determine what the consumer's optimal current-period and future-period consump tions are, and what optimal saving is, and show this in a diagram with the consumer's budget constraint and indifference curves. Is the consumer a lender or a borrower?
Ifthe government collects more in tax revenue than it spends, and households consume more than they get in after-tax income,then a.private and public saving are both positive. b.private and public saving are both negative. c.privatesaving is positive,but public saving is negative. d.private saving is negative,but public saving is positive.
personal consumption expenditures (C) and disposable income (Y d): Year C Y d1 300 400 2 500 700 a. Compute the marginal propensity to consume. b. Compute the amount of savings for years 1 and 2. c. Compute the marginal propensity to save.
The table below provides Income and consumption Data in billions of dollars. Answer questions 21-24 based on it.Disposable Consumption SavingsIncome100 80 --------200 150 ---------What is the marginal propensity to save for this economy? a. 0.75 b. 0.50 c. 0.3 d. cannot be determined
If the government collects more in tax revenue thanit spends, and households consume more than theyget in after-tax income, thena. private saving and public saving are both positive.b. private saving and public saving are bothnegative.c. private saving is positive, but public saving isnegative.d. private saving is negative, but public saving ispositive.
Income choices: a. What will a 2% increase in tax rates do to disposable income? b. If Eduardo’s disposable income increases from $1,200 to $1,700 and his level of saving increases from minus $100 to a plus $100, his marginal propensity to save is:
able 27-1 Y = C + I + G C = 500 + 0.8(Y − T) I = 300 G = 700 T = 0.25Y Table 27-1 Y = C + I + G C = 500 + 0.8(Y−T) I = 300 G = 700 T = 0.25Y Refer to Table 27-1. What is the level of consumption in this model? a. 2,550 b. 2,950 c. 2,350 d. 2,750 e. 2,150

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