Suppose we have the following consumption function in an economy C = 2000 + 0.9YD. How much government spending has to be increased in order to have an increase in equilibrium output equal to 1000? a. 100. b. 200. c. 250. d. 1000. e. none of these. f. do not have adequate information.
Q: Consider two economies (1 and 2) where in equilibrium, the level of aggregate income (Y) is the sum…
A: Aggregate income is the sum total of all the incomes in an economy without adjustments. As given in…
Q: MPC = .75 What is the value of the multiplier?
A: MPC=0.75 MPS=1-0.75 =0.25
Q: Assume that the level of autonomous consumption in an economy equals 600, the level of planned…
A: "Macroeconomic equilibrium occurs at a point where aggregate supply of the economy equates the…
Q: Suppose a closed economy has an intended investment of 200 and an aggregate consumption function…
A: The equilibrium level of output and income is the point where the aggregate expenditure is equal to…
Q: Assume in a simple economy that the level of saving is –500 when aggregate output equals zero and…
A: Given that: Savings (so ) = -500 ; when aggregate output is zero. The marginal propensity to save…
Q: Guideline Saving 2, (3, National Income 1. Only one of the lines in this graph does not represent…
A: The given graph shows the Keynesian view of economic equilibrium in terms of equating aggregate…
Q: 1. Find Equilibrium output/ national income with given following
A: In an open economy, equilibrium is arrived at point where Aggregate Expenditure is equal to Real…
Q: An increase in autonomous consumption, an increase in disposable income, or a decrease in the…
A: Autonomous consumption is that which is independent of the consumer's income level. Disposable…
Q: Suppose that autonomous consumption is 2,190, government purchases are 590, taxes are 0, planned…
A: An autonomous spending depicts the parts of an economy's total use that are not influenced by that…
Q: Assume a hypothetical closed economy. The National income identity expression for this economy is…
A: National income refers to the total money income earned by the citizens of a country in a particular…
Q: Consider an economy described by the following equations: Y = C + I + G C = 100 + 0.8 (Y - T); I =…
A: "Marginal propensity to consume represents the change in consumption for each additional unit of…
Q: Suppose in a simple Keynesian economy, planned consumption function is given by C=250+0.65(Y-T).…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
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: Consider the following consumption function: C = 800 + 0.75 YD for the fictitious economy of…
A: A fiscal multiplier provides the constant value by which iteration occurs in the process of…
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: Consider an economy described by the following equations: Y = C+I+G C = 100+0.75 (Y-T) I = 500-50r…
A: Hi, thank you for the question. As per our Honor code, we are allowed to attempt only first three…
Q: Explain what the consumption function shows and describe what is held constant along the consumption…
A: Consumption function: It depicts the functional relationship between spending on consumption and…
Q: The value of Marginal propensity to consume is double the value of Marginal propensity to save.…
A: We are given with the following information:- The value of MPC is double that of MPS I.e MPC = 2MPS…
Q: Suppose the marginal propensity to consume equals 0.7 (i.e., c1 = 0.7). Given this information,…
A: Aggregate equilibrium in closed economy is given by , Aggregate demand = Aggregate Output where,…
Q: If the marginal propensity to consume is 0.5, individual autonomous consumption is P10,000, and…
A: Here, given information is: MPC (b)= 0.5 Autonomous consumption (c)= P10,000 disposable income (Y)=…
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: 2.8 Consider the following model Y = C+I+G C =a-bT +b(1-k)Y G=G D=G-T-KY An increase in the marginal…
A:
Q: Answer the questions on the basis of the information given in the following diagram: Guideline…
A: Marginal propensity to consume is the ratio of change in consumption and change in income level.
Q: The consumption (Ca) and investment (Ia) functions of this economy are: Ca = 10 + 0.8(Y – T) – 40r…
A: A way of measuring the economic wellbeing of a nation, the GDP is the amalgamation of all the values…
Q: (a)Elaborate THREE (3) determinants in which consumption can be increased…
A: Note: As per the guidelines we’ll answer the 1st question. Please submit a new question by…
Q: Consider the an economy described by the following equations Y = C+I+G C=Co+MPC YD I=d-e.r YD=Y-T…
A: For an economy, a macroeconomic model can be computed by putting together all these endogenous…
Q: If the marginal propensity to save is 0.25, and the government increases its purchases of goods and…
A: The economics as a study is based upon the idea that the resources which are present with the…
Q: The consumption function for a closed economy with no government sector is given by the equation: C…
A: Disclaimer :- As you posted multipart question we are supposed to solve the first 3 only as per the…
Q: Suppose the Consumption function for a particular economic system is: C = 150,000 + .95Y 1. What is…
A: Income of the people split into two saving and consumption , so here we calculate the answer as…
Q: In a simple, private economy, suppose that the MPC is 0.8 and investment rises by $20 million.At the…
A: The investment multiplier says that how much change of investment would cause how much change in…
Q: Suppose that the level of government spending increased by $100 billion where the marginal…
A: Aggregate expenditure: It means the present value of finished goods and services in the economy.
Q: )Which of the following changes will shift the consumption function upward? Part 2 A. an increase…
A: The equation of consumption function is given as C= C+cY Where C is autonomous consumption i.e. does…
Q: Answer the following questions, which relate to the aggregate expenditures model:a. If Ca is $100,…
A: Y = C + I + G + NX
Q: Q1:You are given the following income-expenditures model for an economy : Consumption C =…
A: 3. We have given an investment level of 120. So at equilibrium, we know that investment always…
Q: Suppose a closed economy has an intended investment of 200 and an aggregate consumption function…
A: In a closed economy, Y=C+I+G. Given: Intended investment =200 Consumption function: C = 250 +…
Q: Consider an economy described by the following equations Y = C +I + G C = 100 + 0.75(Y – T) I = 500…
A: Hi Student, thanks for posting the question. As per the guideline we are providing answers for the…
Q: Suppose that disposable income, consumption, and saving in some country are $800 billion, $700…
A: Economic measures use mathematical tools to determine the value of economic variables such that:…
Q: An economy is in equilibrium. Its national is Rs. 5,000 and autonomous consumption expenditure is…
A: Consumption expenditure refers to the level of expenditure incurred by the household in an economy…
Q: What is the amount of shift in AD curve? [Use the multiplier value from (5)] ** Need the answer of…
A: Ques 7) First we need to calculate the multiplier , Y = C+ I + G Y = 250+0.65(Y-150)+ 100 + G Y =…
Q: Consider a closed economy. Let Y denote GDP, C denotes Consumption, I denotes Investment, r is the…
A: Given that: Y = 8,000 C = 600 + 0.8(Y – T) I = 2,000 – 100r T = 500 G = 500 Where Y denotes…
Q: From the table below answer the following questions Y C I G AE 0 20 15 25 100 100 15 25 200 180 15…
A: Given, 1. The autonomous consumption can be referred to as the consumption expenditure that occurs…
Q: In Eiffel Land, the autonomous consumption is 2000, the mpc is 0.6, net taxes are 200, planned…
A: The planned aggregate expenditure is the combined expenditure that economic agents such as consumers…
Suppose we have the following consumption function in an economy C = 2000 + 0.9YD. How
much government spending has to be increased in order to have an increase in equilibrium
output equal to 1000?
a. 100.
b. 200.
c. 250.
d. 1000.
e. none of these.
f. do not have adequate information.
Step by step
Solved in 2 steps
- Assume a closed economy in which, there is no government. If ouput (income) is 800,autonomous consumption is 100, and marginal propensity to consume is 0.70 in this economy.Then calculate the the amount of consumption spending?Y C I G X $ 100 $ 120 $ 20 $ 30 $ 10 $ 300 $ 300 $ 20 $ 30 - $ 10 $ 500 $ 480 $ 20 $ 30 - $ 30 $ 700 $ 660 $ 20 $ 30 - $ 50 a.What is the multiplier? b.What is the equilibrium level of the real GDP? c.What is the value of autonomous consumption?Assume the following information for an economy: Natural level of output = $190b Autonomous consumption = 50 Total investment = 16 Government expenditure = 19 Autonomous taxation = 20 Marginal propensity to consume = 0.6 Based on this information answer the following questions: d) Assume the government increased spending by $5b. Calculate what the new equilibrium level of output will be.
- 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 outputIf the consumption function is C = $800 billion + 0.8Y, a. what is the MPC? __ b. how large is autonomous consumption? $ __ billion c. how much do consumers spend with incomes of $4 trillion? $ __billion d. how much do they save? $ __ billionQ1:You are given the following income-expenditures model for an economy : Consumption C = 300 + .64Yd Tax (T) = $60 Government expenditure G = $100 Investment (I) = $120 From above data calculate the follows: 3. At the equilibrium level of income, what is the amount of savings? 4. Marginal Propensity of Saving (MPS)
- Calculating the MPSAnd MPC. In one year a consumer income increase by $200 and her consumption increase by $140 ? Her marginal propensity to consume is equal to __. Her marginal prosperity to save is equal to __. (Thanks)(a)Elaborate THREE (3) determinants in which consumption can be increased according to the consumption function. (b)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. (i)Calculate the national income equilibrium. (ii)Based on your answer in (i), show the aggregate expenditure graph. (iii)Explain what would happen to the national income equilibrium if the investment changes by RM100 million.Suppose that the linear equation for consumption in a hypothetical economy is C = 40 + .8Y. Also suppose that income (Y ) is $400. Determine (a) the marginal propensity to consume, (b) the marginal propensity to save, (c) the level of consumption, (d ) the average propensity to consume, (e) the level of saving, and ( f ) the average propensity to save.
- Suppose in a simple Keynesian economy, planned consumption function is given by C=250+0.65(Y-T). Planned investment, government purchases, taxes are $100 million, $100 million and $150 million respectively. 3. If government purchases increase to $150 million, what is the new equilibrium level of income? 4. What level of government purchases is needed to achieve an income of $2000 million? 5. From question e) you get the newly government purchase. Now find out the multiplier value 6. What is the amount of shift in AD curve? [Use the multiplier value from (5)]1) Following is information for the economy of Sparkle. All units are milliondollars. Their autonomous consumption is $700, and the marginal propensity to consume is 0.8.Investment spending is constant at $380, and government expenditure is constant at $300.Exports are constant at $500, and imports are constant at $800. Net taxes are constant at $100.Calculate and state your answers for the following questions.a) What is the value of consumption in this economy when the real GDP is $1100?b) What is the value of autonomous aggregate planned expenditure i.e. AE0?c) What is the value of equilibrium aggregate expenditure for this economy?d) What is the value of unplanned changes in the inventory investment when real GDP is$4000?e) What is the size of the multiplier in this economy?f) If investment spending increases by $50, what would be the value of the change in theequilibrium real GDP?Assume consumption is represented by the following function: C=400+0.75Y. Also assume that planned investment (I) equals 100 and there are no government or taxes.
