Q: 5. The data in columns 1 and 2 in the accompanying table are for a private closed economy: LO6 (2)…
A: Meaning of Gross Domestic Product (GDP): The term gross domestic product refers to the situation…
Q: If government spending rises by $100, mps = 0.2, then the GDP multiplier is %3D O 5 O 4 O 1
A: Here, given information is: Change in government spending: $100 Marginal propensity to save (MPS):…
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A: The spending multiplier represents the change in the real gross domestic product or aggregate…
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A: Aggregate Demand is the total value of goods and services produced in an economy over the given time…
Q: Y= C+I+G C= 500 + 0.8(Y-T) I = 300 G= 700 T= 0.25Y Refer to Table 27-1. What is the level of…
A:
Q: If investment increases by $100 and, as a result, gross domestic product (GDP) ultimately increases…
A: Change in investment=$100 Change in GDP=$200
Q: B CF 3 1 2 Disposable income (trillions of 2005 dollars) In the above figure, at a disposable income…
A: Disposable income, the part of the revenue of a person for which the receiver retains full control.…
Q: I: Investment; G: Government spending; EX: Exports; T: Taxes; and IM: Imports. Suppose that I+G+EX…
A: At equilibrium, Y = C + I + G + EX - IM I + G + EX = 25 IM= 15 Y= C + 25 - 15 Y= C + 10
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A: Real GDP is the monetary value of all good and services produced in the economy which is being…
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A: Dear student, you have asked multiple questions in a single post. In such a case, I will be…
Q: What effect will each of the changes listed in Study Question 3 of Chapter 27 have on the…
A: GDP (Gross Domestic Product): It refers to the production of goods and services which are being…
Q: If the average propensity to consume is 0.75, and the marginal propensity to consume is 0.70, if…
A: Change in Consumption=Marginal Propensity to Consume×Change in Income Spending Multiplier=11-MPC As…
Q: 66. Consider the following consumption function C = 1100 + 0.6Yd What is autonomous consumption? O…
A: Autonomous consumption is being defined as the expenditures which the consumers must make even while…
Q: 60. If Eman received a $1,000 increase in disposable income and her marginal propensity to save is…
A: Disposable Income = $1000 MPS (or Marginal Propensity to Save) = 0.15 Since, MPC + MPS = 1,…
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A: Answer: Given that: LAST WORD What is Say's law? How does it relate to the view held by classical…
Q: Question 20 $60 O $40 + * $20 + $50 100 150 200 Disposable Income(Y) -20 Refer to the diagram. The…
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A: Given: The MPC is = 4/5 The taxes hiked by = $250 billion To Find: The change in GDP:
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A: Disposable income is the measure of cash that an individual or family needs to spend or save after…
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A: Simply put, ‘People’s Collection’ means a fall in Investment due to rising interest rates caused by…
Q: What will the multiplier be when the MPS is 0, 0.4, 0.6, and 1? What will it be when the MPC is 1,…
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Q: If the multiplier is 4, what is the MPC? O 0.25 O 0.5 O 0.75 1
A: Given: Multiplier (k) = 4
Q: Question 5 $60 $40- $20- $50 100 150 200 Disposable Income(Y) -20 Refer to the diagram. The average…
A: Disposable income is the sum of consumption and saving. Average propensity to consume is consumption…
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A: Calculate the tax multiplier as follows: Tax multiplier = -MPC/1-MpC +(MPC*t) =- 0.8/1-0.8+0.8*0.4 =…
Q: Consider a closed economy for which GDP is equal to 22,000, taxes are equal to 7,000, consumpta…
A: In a closed economy there is no trade with other countries thus net export equals zero.
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Q: Refer to problem 3. The spending multiplier is O 5 O 4 O 0.8 O 2
A: Spending multiplier = 1 / [1 - MPC] MPC = Chnage in consumption / Chnage in income
Q: What will the multiplier be when the MPS is 0, 0.4, 0.6, and 1? What will it be when the MPC is 1,…
A: Marginal propensity to save (MPS) is a monetary proportion of how reserve funds change, given an…
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A: [1] If real GDP is $13 trillion and planned aggregate expenditure is $13.5 trillion, then…
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Q: Suppose two successive levels of disposable personal income are $13.8 and $18.8 billion,…
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Q: 7. LAST WORD On average, does an increase in taxes raise or lower real GDP? If taxes as a percentage…
A: Answer: On average an increase in taxes lower the real GDP. It is because due to the increase in…
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Q: If people expected that a fiscal policy in the form of a tax cut was temporary, then this policy's…
A: This policy would be weaker because it would be temporary.
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A: Given: Equilibrium monthly wage = 1000 Equilibrium number of labors = 50
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A: Here, the given graph shows the relationship between consumption and leisure choices of a consumer.
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- QUESTION 1An individual lives for two periods and decides how much to consume in each period.- In the first period his consumption equals C1 and his income Y1 = 200- In the second period his consumption equals C2 and his income Y2 = 100He can save or borrow money in the first period to finance his consumption in the second period.The interest rate he gets in case he saves or has to pay in case he borrows money equals 7%.Determine the budget constraint of this individual. C2 = −0.935·C1 +314C2 =−1.07·C1 +314C2 =−0.8·C1 +314C2 =−1.08·C1 +314 QUESTION 2The total production of a good y is determined by the production function y = 3L2/3K1/3, where L is labour input and K capital input.The reward (factor prices) for labour and capital are, l = 27 en r = 2, respectively.The producer needs to produce 9000 units of good y.How much units of labour will he hire if he wants to miminize his total costs? 1587,4839,953000515,23 QUESTION 3A good is traded on a perfectly competitive…You are an economic advisor to the government. Discuss your opinion . a) How COVID-19 pandemic will affect the consumption behavior as well as the investment done by the firms and household for the next two years? b) What are the actions or policies that the government can implement to face this situation? please answers with analysis and --graph (if possible)jamie has $100 that he can spend on milk and gas. A gallon of milk costs $5.However, government gives its citizens a coupon that entitles people to 20%discount on their first 10 gallon milk purchases. Gas costs $4 per gallon andgovernment charges $1 for each gallon of purchased gas. Jamies utility functionis U (x, y) = 9x+10y, where x and y represent gallons of milk and gas consumed,respectively. What is Jamies optimal consumption of milk and gas?Part bIf government removes the quantity restriction to which the coupon applies (i.e.20% discount is applied to any quantity of milk purchased), what will be jamieoptimal consumption?
- An individual's utility function is given by: U (q1 , q2) = q11/2 . q2 Suppose we know that the individual is maximizing their utility by consuming 9 units of good #1 (q1=9) and six units of good #2 (q2=6). If the current price for good #1 is $1 (p1=1), what must be the price of good #2 (p2) and what must be the individual's current income (y) available to spend on the two goods? a.) p2 = b.) y=DI=Y OUTPUT/INCOME CONSUMPTION(C) SAVINGS (S) MPC MPS APC APS 0 80 ______ ____ _____ _____ _____ 100 140 _______ _____ _____ _____ __ ____ 200 200 _______ _____ _____ _____ _____ 300 260 _______ _____ ______ ______ _____ 400 320 _______ ______ ______ ______ ______ a. Complete the following chart above b. Show graphically ( what is the equilibrium level of output)? c. Assume the following general forms of a…Suppose you expect to earn $10 this year and $10 next year. Each dollar you earn this year can be either spent, or saved at an interest rate of 10%. If you want to spend more than $10 this year, you can borrow money at 10% interest and repay it next year. Next year, you plan to pay oyour debts (if any), then spend all your earnings and all your savings (if any). Draw your budget line between “dollars spent this year" and “dollars spent next year". Suppose the government imposes a 50% income tax on all your earnings this year and next year (not including your interest earnings). Draw your new budget line. Suppose the government imposes a 50% sales tax on everything you buy this year and next year. Draw your new budget line. Suppose the government imposes a 50% income tax on all your earnings this year and next year, including your interest earnings. Draw your new budget line. True or False: If interest earnings are not subject to income tax, then an income tax and a sales tax…
- H7. Consider an economy consisting of two consumers, Adam and Eve. There are two goods, apples and bananas. Adam likes apples and prefers more apples to less. He somewhat likes bananas: he prefers one banana to none, but is indifferent between having one banana and having more than one banana (i.e., he gets satiated with bananas after having one banana). Eve likes bananas and prefers more bananas to less; she is indifferent to apples. There are exactly 5 apples and 4 bananas available in this economy. Describe all Pareto optimal allocations in this economy. Explain.A consumer has $280 to spend on two commodities, the first of which costs $2 per unit and the second $5 per unit. Suppose that the utility derived by the consumer from x units of the first commodity and y units of the second is given byU(x,y)=100x0.25y0.75How many units of each commodity should the consumer buy to maximize utility? Compute the Lagrange multiplier λ and interpret in economic terms.Tom's income is 32. He consumes a single consumption good, C, which has a price of 2. His utility function depends on his marital status: when happily married, his utility is given byU=C^(1/2) When he is not married, his utility is given by U=0.5C^(1/2) a. Suppose that Tom is not currently married. What is his utility? Now suppose that Tom gets married.What is his utility? Assume Tom can spend all his income on his own consumption when he is married. b. Use compensating variation (CV) and equivalent variation (EV) to calculate the value of marriage to Tom. How do the two figures compare?
- Suppose there was a debate regarding how to spend $1 billion in newly found revenues in the budget. Suppose the most liberal Democrat suggests an increase to Food Stamp (SNAP) allotments. Suppose the most conservative Republican suggests an increase in defense spending. The Republican says that, on average, military spending does the most good, so more is better. The Democrat is arguing that the extra food purchased by the extra spending will increase well-being the most. What is going on here? A . Both are employing marginal analysis, just from different perspectives. B. Only the Democrat is using marginal analysis. C. Only the Republican is using marginal analysis. D. Neither are using marginal analysis.Columns 1 through 4 of the accompanying table show the marginal utility, measured in utils, that Ricardo would get by purchasing various amounts of products A, B, C, and D. Column 5 shows the marginal utility Ricardo gets from saving. Assume that the prices of A, B, C, and D are $18, $6, $4, and $24, respectively, and that Ricardo has an income of $105. What quantities of A, B, C, and D will Ricardo purchase in maximizing his utility? How many dollars will Ricardo choose to save? Check your answers by substituting them into the algebraic statement of the utility‑maximizing rule. In other words, show it works when using this rule.Assume the following behavioral equations for a macroeconomy: C = 100 + .9Yd, l = 50, T= $100 and G = $40 from the above behavioral equation tax multiplier is Select one: O a. 1 b. none of the options O c. 10 O d. 9