Which one of the following pairs of points coincide(Li) : O The Break-even point and the national income equilibrium point. The Break-even point and the Full employment point. O The Full employment point and the national income equilibrium point. The Break-even point and the point of income level where saving equals zero.
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- During the 2012 fiscal year, households in an economy spent 80 per cent of their disposable income on consumption as well as GH¢300 consumption expenditure which is independent of income. Total government expenditure which stood at GH¢800 was supposed to be financed from a proportional tax levy of 50 per cent of national income and a VAT of GH¢100. Total private investment spending was made up of GH¢400 whereas export was GH¢400 and anautonomous import of GH¢500. Also, marginal propensity to import was 0.15.1. Determine the equilibrium national income for this economy.2. Determine the consumption and savings levels at equilibrium national income.3. Find the size of the (expenditure) multiplier.4. Determine the new equilibrium level of income if government expenditure increases by GH¢70.5. If full employment output is 2000, what macroeconomic problem does this economy face? 6. In what direction should government expenditure change in order to achieve full employment output? 7. Determine…Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300 million with the proportion of an increase in income that is spent on consumption is 0.5. An induced tax of 20% is imposed by the country. The amount of investment is RM250 million, and the amount of government spending is RM150 million. Explain what would happen to the national income equilibrium if the investment changes by RM100 million.In a certain year the aggregate amount demanded at the existing price level consists of $100 billion of consumption, $40 billion of investment, $10 billion of net exports, and $20 billion of government purchases. Full-employment GDP is $200 billion. To obtain full employment under these conditions the government should: encourage personal saving by increasing the interest rate on government bonds. decrease government expenditures. reduce tax rates and/or increase government spending. discourage private investment by increasing corporate income taxes
- If we plot the accounting definiton Y = C +1 and the consumption function C=cY on axes labelled C and Y, an increase in the popensity to consume will lead to: a. a change in the slope of the national accounting definition b. a change in the slope of the consumption function c. a change in the intercept of the national accounting definition d. a change in the intercept of the consumption functionSuppose the aggregate expenditure schedule for an economy is given by the equation: AE = 800 + 0.8Y Where AE represents the aggregate expenditure and Y represents the national income (output) level. Calculate the equilibrium level of national income in this economy.Equilibrium exists at any output-income level in which the output level gives rise to an employment level which gives rise to an income level which gives rise to a total spending level which is just sufficient to clear total output off the market. Why is this a true statement?
- Table 2 shows elements in the national income accounts of an economy. Assume the economy is currently in equilibrium. Elements £ billions Consumption (total) 80 Investment 9 Government Expenditure 6 Imports 15 Exports 8 What is the current equilibrium level of income? What is the level of injections? What is the level of withdrawals? If national income now rises by £22 billion and as a result, the consumption of domestically produced goods rises to £80 billion. Calculate the marginal propensity to consume (MPC)What is the value of the multiplier? What is the value of the multiplier? Comment on the results in part (3) and (4).Inflationary GDP is the amount by which equilibrium real GDP falls short of the full employment level of GDP. True or FalseIf the autonomous expenditure by the government increases by 7000 and the MPC is 0.2 find the level of new income in the economy
- The amount by which equilibrium real GDP exceeds full-employment GDP is known as (2pts) Question 12 - The amount by which equilibrium real GDP exceeds full-employment GDP is known as stagflation employment. a recessionary gap. an inflationary gapHome equity is the single largest component of net wealth for most families in the United States. If home equity falls a. autonomous consumption will decrease, shifting the aggregate planned expenditure line downward b. the marginal propensity to consume will decrease, decreasing the slope of the aggregate planned expenditure line c. autonomous consumption will increase, shifting the aggregate planned expenditure line upward d. the marginal propensity to consume will decrease, increasing the slope of the aggregate planned expenditure line e. autonomous consumption will decrease, shifting the aggregate planned expenditure line upwardSuppose the level of autonomous investment in an economy is 200 and the consumption function is given by C=80+0.75Y. Find the equilibrium level of income What will be the increase in national income if investment is increased by 25.