Troll Island is a small island nation that recently experienced an autonomous change in aggregate expenditures (AE). AE increased by 8 billion, and the marginal propensity to consume on Troll Island is equal to 0.55. What is the change in Troll Island's real GDP after the increase in AE? Enter your answer in billions of dollars, rounded to one place after the decimal. For example, an answer of $2,500,000 should be entered as 2.5. $ billion
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- Troll Island is a small island nation that recently experienced an autonomous change in aggregate expenditures (AE). AE increased by 5 billion, and the marginal propensity to consume on Troll Island is equal to 0.73. What is the change in Troll Island's real GDP after the increase in AE? Enter your answer in billions of dollars, rounded to one place after the decimal. For example, an answer of $2,500,000 should be entered as 2.5. $ ______ billionTroll Island is a small island nation that recently experienced an autonomous change in aggregate expenditures (AE). AE increased by 77 billion, and the marginal propensity to consume on Troll Island is equal to 0.850.85. What is the change in Troll Island's real GDP after the increase in AE? Enter your answer in billions of dollars, rounded to one place after the decimal. For example, an answer of $2,500,000 should be entered as 2.5.What is the eventual effect on real GDP if the government increases its purchases of goods and services by $75,000? Assume the marginal propensity to consume (MPC) is 0.75. $ What is the eventual effect on real GDP if the government, instead of changing its spending, increases transfers by $75,000? Assume the MPC has not changed. $ An increase in government transfers or taxes, as opposed to an increase in government purchases of goods and services, will result in an identical eventual effect on real GDP. no change to real GDP. a larger eventual effect on real GDP. a smaller eventual effect on real GDP.
- Suppose the marginal propensity to consume (MPC) is either 0.75, 0.96, or 0.62. a. For each value of the MPC, calculate the impact of a one-dollar decrease in taxes on GDP. Instructions: Enter your responses rounded to one decimal place. MPC Impact of a one-dollar decrease in taxes 0.75 0.96 0.62 b. For each value of the MPC, calculate the impact on GDP of a $250 million decrease in taxes. Instructions: Enter your responses rounded to one decimal place. MPC Impact on GDP 0.75 $ 0.96 $ 0.62 $ Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.The following table shows consumption (C), investment spending (I), and government purchases (G), for some hypothetical economy at several levels of income (reported in billions of dollars of real GDP). Assume that in this economy, income is taxed at a rate of 25%, base consumption is $25 billion, and that the marginal propensity to consume (MPC) is 0.333, or 1/3. Further assume that this economy is closed, that is, there is no international trade and so net exports are always equal to zero. Use the given information to fill in disposable income, consumption, and planned expenditures in the following table. Income: Real GDP Disposable (After Tax) Income C Ip G Planned Expenditures (Billions of dollars) (Billions of dollars) (Billions of dollars) (Billions of dollars) (Billions of dollars) (Billions of dollars) 0 0 25 150 50 100 150 50 200 150 50 300 150 50 400 150 50 500 150 50…Aggregate Expenditures and Multipliers Assignment a. Using the aggregate expenditure function above, what is the current level of real GDP? b. Using the aggregate expenditure function above, what would be the level of real GDP if the aggregate expenditure function shifted up by $0.2T? c. If Investment expenditures increase by $300B and MPC is equal to 0.90, what will be the increase in real GDP? d. If Government expenditures increase by $800B and MPS is equal to 0.05, what will be the increase in real GDP?
- Due to an increase in consumer wealth, there is a $40 billion autonomous increase in consumer spending in the economies of Westlandia and Eastlandia. Assuming that the aggregate price level is constant, the interest rate is fixed in both countries, and there are no taxes and no foreign trade, complete the accompanying tables to show the various rounds of increased spending that will occur in both economies if the marginal propensity to consume is 0.5 in Westlandia and 0.75 in Eastlandia. What do your results indicate about the relationship between the size of the marginal propensity to consume and the multiplier?Income is 678 Trillion and consumption is 662 Trillion then income increases to 698 Trillion and consumption increases to 677 Trillion. What will the marginal propensity to consume be? .75 .8566 1.8 .8 None of the above Using the information and the calculations from question seven what will the multiplier be 9 4 5 3 None of the above Using the information and the calculations from questions seven and eight and given a full employment level of aggregate expenditure GDP of 600 and a current level of aggregate expenditure of 560 how much would government spending have to change to regain the full employment level of GDP Increase in government spending of 8 Decrease in government spending of 8 Increase in government spending of 10 Decrease in government spending of 10 None of the above Using the information and calculations form questions seven, eight, and nine how much would government taxes have to change by in order to regain the full employment level of…The Italian government decides to stimulate the economy by sending checks worth $70 billion to Italian consumers. If the government spending multiplier is 1.5 , calculate the MPC to determine the final change in Italy's real GDP due to the transfer. Please give your answer as a whole number in billions of dollars. $ billion The Greek government decides to introduce new austerity measures, which reduce government direct spending by $16 billion. Greece has a marginal propensity to consume of 0.6 . What will be the final change in real GDP as a result of this decreased spending? Please give your answer as a whole number in billions of dollars. The Japanese government decides to stimulate the economy by increasing direct spending by $70 billion. If the final change in real GDP is $280 billion, what is Japanese consumers' marginal propensity to consume (MPC)? Please round your answer to two decimal places
- In the economy of Keynesian Island, autonomous consumption expenditure is $50 million, and the marginal propensity to consume is 0.8. Investment is $160 million, government expenditure is $190 million, and net taxes are $250 million. Investment, government purchases, and taxes are constant—they do not vary with income. The island does not trade with the rest of the world. If the government increases its purchases by $200 million, what will be the change in the economy's equilibrium real GDP? Show the change on the graph as well.Assume the current equilibrium level of income is $200 billion as compared to the full-employment income level of $240 billion and that consumption is the only component of aggregate expenditures that depends upon the level of GDP. If the MPC is 5/8, what change in aggregate expenditures is needed to achieve full employment?The following table shows consumption (C), investment spending (I), and government purchases (G), for some hypothetical economy at several levels of income (reported in billions of dollars of real GDP). Assume that in this economy, income is taxed at a rate of 25%, base consumption is $50 billion, and that the marginal propensity to consume (MPC) is 0.667, or 2/3. Further assume that this economy is closed, that is, there is no international trade and so net exports are always equal to zero. Use the given information to fill in disposable income, consumption, and planned expenditures in the following table. Income: Real GDP Disposable (After Tax) Income C Ip G Planned Expenditures (Billions of dollars) (Billions of dollars) (Billions of dollars) (Billions of dollars) (Billions of dollars) (Billions of dollars) 0 0 50 100 50 100 100 50 200 100 50 300 100 50 400 100 50 500 100 50…