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Q: C = 450 + 0.4Y I = 350 G = 150 X = 70 Z = 35 + 0.1Y T = 0.15Y Yf = 1550 (Hint: use the multiplier…
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A: C= 500 + 0.8 (Y – T), I= 200, G= 300, NX= 50, T= 200, Yf= 5000 MPC = 0.8
If consumption is C=100+0.75Yd
Taxes is T=50+0.5Y
Export is X=200
Import is M=50+0.25Y
Government spending is G=150
Investment is I=200
.Use the multiplier applicable to export,to explain how a100–billion decline in
(i) GDP/income
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- Suppose an economy with the following characteristics.Y = Real GDP or national incomeT = Taxes = 0.3YC = Consumption = 140 + 0.9(Y – T)I = Investment = 400G = Government spending = 800X = Exports = 600M = Imports = 0.15YGiven the information above, What is this economy’s spending multiplier?Suppose that Kim K decides to spend $30,000 on an American‑made purse instead of donating it to Haitian earthquake relief. Assume that the multiplier is 1.91.9. How much will GDP rise when Kim K buys her purse according to the multiplier effect? $$ Buying the purse increases America's GDP donating the money to Haitian earthquake relief. Suppose she instead donated to tornado relief in Joplin, MO. Buying the purse increases GDP spending on tornado relief.Given consumption = 100 +0.75Yd Tax = 50 + 0.5Y Export = 200 Import = 50 + 0.25Y Government spending = 150 Investment = 200 (a) Determine the value of the economy’s multiplier, which is applicable to government spending, and interpret it.
- = 450 + 0.4Y I = 350G = 150X = 70Z = 35 + 0.1Y T = 0.15YYf = 1550Q.2.1 Calculate the level of autonomous spending in this economy.(2)Q.2.2Calculate the size of the multiplier(Note: Round your answer to two decimal places)(4)Q.2.3Calculate the equilibrium level of income (Hint: use the multiplier method)(2)© The Independent Institute of Education (Pty) Ltd 2020Page 6 of 10 202020Q.2.4Q.2.5Q.2.6Question 3Calculate the tax revenue to the government of this country when the economy (2) remains in equilibrium.Calculate what the new equilibrium income should be if the government of this (6) country decides to cancel all taxes, implying the tax rate would now be 0%.Before the government decreased the tax rate, how much of government spending was required to bring the economy to full employment?Hi there . can you please assist on the folloiwng question below. Use the following information on economy X to answer the questions below.Consumption function: C = 250 + 0.8YInvestment spending: I = 150Government spending: G = 500Exports of goods and services: X = 200Imports of goods and services: Z = 150Proportional tax rate: t =25%Full employment level of income = 3575 Q..1.1 Calculate total autonomus spending for economy X. Q..1.2 Calculate the multiplier for economy X. Q.1.3 Calculate the equilibrium income for the economy. Q.1.4 Calculate the change in government spending required to reachfull employment level of income.You are given the following information for the economy of Datalink: C = 250 + 0.85Yd T = 150 + 0.5Y I = 280 G = 400 X = 600 M = 100 - 0.125Y Determine the equilibrium level of income. What is the value of the multiplier? What is the level of consumption, government revenue and imports at the equilibrium level of income? If the government wishes to increase the equilibrium level of income by 200 to close a deflationary gap, by how much must government spending rise to achieve this? What is the government’s budget stance? Produce a sketch of your answers in (i) and (iv) above. Assume that this hypothetical economy is experiencing a severe recession, by how much would government spending have to increase to shift the aggregate demand curve rightward by GH¢ 2500. How large a tax cut would be needed to achieve this same increase in equilibrium income? Why does the tax cut not have the same effect as the increase in government spending?
- Suppose an economy is described by the following equations: Y = C + I + G + X – M C = 14 + 0.60Yd I = 20 G = 20 X = 15 M = 5 +0.1Y T = 20 + 0.4Y Where Y is domestic income Yd is private disposable income C is aggregate consumption spending T is government tax revenue I is investment spending G is government spending E represents exports M represents imports of goods and services. (a) Find out the equilibrium value of income. (b) What is the value of export multiplier?Q.4.1 Use the following information on economy X to answer the questions below.Consumption function: C = 250 + 0.8YInvestment spending: I = 150Government spending: G = 500Exports of goods and services: X = 200Imports of goods and services: Z = 150Proportional tax rate: t =25%Full employment level of income = 3575Q.4.1.1 Calculate total autonomus spending for economy X. Q.4.1.2 Calculate the multiplier for economy X. Q.4.1.3 Calculate the equilibrium income for the economy. Q.4.1.4 Calculate the change in government spending required to reach full employment level of income.Use the following information on economy X to answer the questions below.Consumption function: C = 250 + 0.8YInvestment spending: I = 150Government spending: G = 500Exports of goods and services: X = 200Imports of goods and services: Z = 150Proportional tax rate: t =25%Full employment level of income = 3575Q.4.1.1 Calculate total autonomus spending for economy X. Q.4.1.2 Calculate the multiplier for economy X. Q.4.1.3 Calculate the equilibrium income for the economy. Q.4.1.4 Calculate the change in government spending required to reachfull employment level of income.
- If the economy is currently at Q1 at $400 billion. If the economy is currently at Q3 $2000 billion Qf (full potential GDP) is at $1200 billion. MPC = .8 Calculate the simple multiplier? 2. Specifically, calculate the amount of money that should be implemented for each policy type at Q1 3. Specifically, calculate the amount of money that should be implemented for each policy type at Q3 Multiplier Equations Change in GDP = Change in Gov’t Spending * Multiplier Change in GDP = Change in Tax * Multiplier * MPC Multiplier = 1 (1-MPC)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 From the model above you can see that government purchases (G) are counter-cyclical, that is, G is increased as national income decreases. If you compare this specification of G with one that has a constant level of government spending (for example, Go = 300), how would the value of the expenditure multiplier differ?