The following are the parameters for the simple economy of Minnerva, which has no government involvement and no international trade. C= 1,160 - 0.75Y |= 1,250 a. The value of expenditures equilibrium is $ b. The value of the multiplier is Round your answer to 3 decimal places. c. If investment increases by 400, the new value of expenditures equilibrium is $
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- In an economy with no government and no foreign sectors, autonomous consumer spending is $250 billion, planned investment spending is $350 billion, and the marginal propensity to consume is 2/3. c) What is Y*, income-expenditure equilibrium GDP? d) What is the value of the multiplier? e) If planned investment spending rises to $450 billion, what will be the new Y*?Suppose the economy's multiplier is 2. Other things equal, a $15 billion decrease in government expenditures on national defense will cause equilibrium GDP to Multiple Choice decrease by $30 billion. decrease by $120 billion. increase by $30 billion. decrease by $15 billion. remain unchanged.Assume an economy in which:(i) there are no exports and no imports,(ii) investors always want to spend $200 billion, or I = 200,(iii) government spends $500 billion and tax revenue is $200 billion,(iv) consumption is a linear function of disposable income, C=100+0.8YdAnswer the following questions:a. What is the marginal propensity to save (MPS)?b. What is the saving equation?c. What is the equilibrium level of national output/income (Y)?d. At the equilibrium income level (Y*, your answer to c) calculate private saving,and explain the relationship between private saving and planned investment?
- Mexico's real GDP fell from 4.5 trillion pesos to 3.8 trillion pesos over the first part of 2020. In that same time, its consumer spending fell from 3.1 trillion pesos to 2.5 trillion pesos. Assume that real GDP represents disposable income. Using these values, what is the size of the government spending multiplier?You are given the following information about a closed economy with no government: Consumption = 115 + 0.6YInvestment = 550Use the above information to answer the questions that follow: Q.4.1 Calculate the value of autonomous spending. Q.4.2 Calculate the value of the multiplier. Q.4.3 Calculate the equilibrium level of income.In an economy with no government and no foreign sectors, autonomous consumer spending is $250 billion, planned investment spending is $350 billion, and the marginal propensity to consume is 2/3. a) Plot the aggregate consumption function and planned aggregate spending. b) What is unplanned inventory investment when real GDP equal $600 billion? c) What is Y*, income-expenditure equilibrium GDP? d) What is the value of the multiplier? e) If planned investment spending rises to $450 billion, what will be the new Y*?
- An economy has a marginal propensity to consume of 0.5, and Y*, the income-expenditure equilibrium GDP, equals $500 billion. Given an autonomous increase in planned investment of $10 billion, answer the following questions. a. What is the value of the multiplier? Value of the multiplier = b. What would you expect the total change in Y* to be based on the multiplier formula? Change in Y* based on the multiplier = billion c. What is the total change in real GDP after the 10 rounds? It may be beneficial to make a table on a separate sheet of paper to calculate the change in real GDP for each of the rounds, and then add up the values. Total change in real GDP (10 rounds) =TRUE/FALSE When we add the marginal propensity to import to our model, the spending multiplier falls. In fact, the higher the marginal propensity to import, the smaller the spending multiplier, all else constant.Based on the economic data of a country presented in the following table, complete the table! Question: a. Based on this information, complete the blank data. b. Determine what level of equilibrium income, consumption and savings are at equilibrium c. If there is an increase in government spending by 50 what is the new level of national income. d. how big is the multiplier in this model? What does it mean? e. Draw a graph of the balance of national income and its changes
- V1 Consider the following information for a country: Consumption function: C = 85+0.8Yd Investment function: l = 85 Government spending: G=60 Net taxes: T = -40+0.25Y Disposable Income: Yd = Y - T Equilibrium: Y = C + l + G The level of equilibrium income, Y, = $_____(Enter response rounded two decimal places) The government collects net taxes of $_____ Remember the budget surplus is equal to taxes minus government spending, The governments budget surplus is $____The following equations describe an economy: Y = C + I + G + X – M [where X=exports, M=imports] C = 150 + 0.7*(Y - T) T = 30 I = 300 G = 60 X = 140 M = 100 + 0.2*(Y - T) Which of the following statement is true? The value of the government spending multiplier is 3.33. If exports increase by 10, equilibrium Y will increase by 20. If government spending increases by 40, equilibrium Y will increase by 333. Without any changes, the equilibrium level of Y is 2167.consumption function is given by C = 110 + 0.75(Y - T). Planned investment is 300; government purchases is 350. Assume a balanced budget. Graph planned expenditure as a function of What is the equilibrium level of income? If government purchases increase to 400, what is the new equilibrium income? What is the multiplier for government purchases? What level of government purchases is needed to achieve an income of 2,200? (Taxes remain ) What level of taxes is needed to achieve an income of 2,200? (Government purchases remain at )