The rate of output and planned expenditures for the economy of Timbuktu are shown in the following table: Total Output Planned Aggregate Expenditures (Two-Sector Economy) (Real GDP in billion dollars) (in billions) 5,000 5,250 5,500 5,500 6,000 5,750 6,500 6,000 7,000 6,250 a) If the current output rate is $5.0 trillion, what will tend to happen to business inventories, future output, and employment? b) If the current output rate is $6.5 trillion, what will tend to happen to inventories, future output and employment? c) What is the equilibrium rate of income/output of Timbuktu economy?
The rate of output and planned expenditures for the economy of Timbuktu are shown in the following table:
Total Output Planned Aggregate Expenditures (Two-Sector Economy)
(Real
5,000 5,250
5,500 5,500
6,000 5,750
6,500 6,000
7,000 6,250
a) If the current output rate is $5.0 trillion, what will tend to happen to business inventories, future output, and employment?
b) If the current output rate is $6.5 trillion, what will tend to happen to inventories, future output and employment?
c) What is the equilibrium rate of income/output of Timbuktu economy?
d) If the economy's full employment rate of output is $6.0 trillion, what will happen to the
e) What would happen to the equilibrium level of output/income if there will be an autonomous increase in investment of $250 billion?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
