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The capitalized cost of $ 10,000 , every 5 years forever, starting now at an interest rate of 10% per year?
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- Assume: Y= C + I + G + NX C = 400 + (0.8)YD Io = 200 G = 300 + (0.1)(Y* - Y) YD = Y - TA + TR NXo = - 40 TA = (0.25)Y TRo = 50 Assume the equation for net exports changes from NXo= - 40 to NX1 = - 40 - mY. How would this affect expenditure multiplier, if we assume that 0 < m < 1?1. In using the expenditure approach to GDP, consumption.... 2.The long -run aggregate supply curve is ? 3. National saving equals private saving plus government saving ,which inturn equals? 4. The mpc and mps measures charges in consumption expenditure and saving that result from changes in ? 5. The sum of the components aggregate expenditure that are not influence by real GDP is called ?9. If the MPC is greater than zero but less than one, then we can be sure that when disposable income rises by P1 consumption will: a. not be affected b. will rise by more than P1 c. will rise by less than P1 d. will rise by exactly P1.
- Determine aggregate expenditures (AE) in this economy when real GDP (Y) is equal to $1,500 billion, $2,000 billion, and $2,500 billion.When Y = $1,500 billion, AE = billion .When Y = $2,000 billion, AE = billion . When Y = $2,500 billion, AE = billion .ADVANCED ANALYSIS Assume that the consumption schedule for a private closed economy is such that consumption is: C = 100 + 0.75Y Assume further that planned investment Ig is independent of the level of real GDP and constant at Ig = 50. Recall also that, in equilibrium, the real output produced (Y) is equal to aggregate expenditures: Y = C + Ig Instructions: Enter your answers as whole numbers.a. Calculate the equilibrium level of income or real GDP for this economy. Equilibrium GDP (Y) = $ . b. What happens to equilibrium GDP if Ig changes to 60? Equilibrium GDP (Y) = $ . What does this outcome reveal about the size of the spending multiplier? Spending multiplier = .in an imaginary economy, there is no foreign trade and no government activity. APC = MPC = 0.08. In equilibrium, consumption expenditure is Rs,20, 000 Million. (a) What is ihe level of invesiment expenditure? (b) What is the value of the multiplier (c) Suppose investment spending remains unchanged but both APC and MPC fall to 0.06, what is the new equilibrium level of national income?
- Question 17 – Question 20: In this question, interest rate and prices are held fixed, and the economy can be described by the income-expenditure model. Consumption: C = 190 + 0.8YD; where YD = disposable income Investment: I = 180 – 50i, where i = 0.1 (10% & it is held fixed) Government spending: G = 183 Taxes: T = 272 Transfers: TR = 57 Exports: X = 18 Imports: IM = 24 Question 17 If the current level of output is 1975, find the levels of national savings and unplanned investment. Be sure to show your work rounded your answer to 2 decimal places if necessarySuppose a closed economy has an aggregate consumption function given by C = 300 + 0.75Yd and generates $2200 output and income in equilibrium. Suppose also that the government collects a lump-sum tax of 300. How much will the private sector be saving total in equilibrium? (round your answer to the nearest whole value)a)What will the multiplier be given the MPS values below? Fill in the table with your answers. Instructions: round your answers to 2 decimal places. MPS Multiplier 0.0 0.4 0.5 1.0 b) What will the multiplier be given the MPC values below? Fill in the table with your anwers. MPC Multiplier 1.0 0.9 0.75 0.5 0 c) How much of a change in GDP will result if firms increase their level of investment by $ 8 billion and the MPC is 0.80? ( Enter your answers as whole numbers) How much of a change in GDP will result if firms incresese their level of investment by $ 8 billion and the MPC instead is 0.67?
- 1. Given a particular aggregate expenditure function, which of the following must be true if the prevailinglevel of income is greater than planned aggregate expenditure? (4 marks)A Firms’ inventories are falling unintentionally.B Planned investment is less than saving.C The aggregate expenditure function will shift downward.D Businesses will increase production.Assume taxes are zero and an economy has a consumption function of C = 0.72 (Yd) + $587.32. By how much will savings change if disposable income in the economy changes by 123? Round your answer to two digits after the decimal and be sure to provide a negative sign if it decreases.The graph models an economy in equilibrium with a real GDP of $180 billion. Suppose that consumers' expectations about future incomes change, causing unplanned inventory investment to increase by $30 billion. Shift the planned aggregate expenditure (AE) line to show the effect of this change. *Image* 1) This change will cause the equilibrium level of real GDP to a) decrease. b) remain unchanged. c) increase. 2) By how much will GDP change once the new equilibrium is reached? If GDP will decrease, be sure to include a negative sign. GDP change: $ ________ billion
