You are given the following information about a closed economy with no government: Consumption = 115 + 0.6Y Investment = 550 Use the above information to answer the questions that follow: Q.4.3 Calculate the equilibrium level of income. (3)
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You are given the following information about a closed economy with no government:
Consumption = 115 + 0.6Y
Investment = 550
Use the above information to answer the questions that follow:
Q.4.3 Calculate the equilibrium level of income. (3)
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- You are given the following information about a closed economy with no government:Consumption = 445 + 0.75Y Investment = 250 Calculate the equilibrium level of income.suppose the government in this economy decides to decrease government purchases by 300 billion decrease in government purchases will lead to a decrease in income generating an initial change in consumption equal toSuppose a closed economy with no government spending or taxing is capable of producing an output of $3,000 at full employment. Suppose also that autonomous consumption is $400, intended investment is $200, and on average households will save 25 cents of every additional dollar of income they receive. Calculate the following (express your answers as whole numbers without decimals, commas, dollar signs, or anything else). I found Value of output (Y) in equilibrium: ___2400___ Total consumption in equilibrium: ___2200___ I'm trying to find the multiplier. Could you show me a step by step on how you would figure the multiplier out?
- You are given the following information about a closed economy with no government: Consumption = 445 + 0.75Y Investment = 250 Use the above information to answer the questions that follow: Q.4.1 Calculate the value of autonomous spending. (2) Q.4.2 Calculate the value of the multiplier. (3) Q.4.3 Calculate the equilibrium level of income. (3) Q.4.4 Clearly explain the characteristics of the consumption function. (6) Q.4.5 What is the main determinant of the level of investmentConstruct a consumption function from the data given here and determine the MPC. Given the consumption function in the above question, what is the relationship between disposable income and consumption? Is it direct or indirect and then explain what it means.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) If the equilibrium national income is less than the full-employment level of income by N$100, what should be the increase in government spending or in exports to attain the full-employment level of income? (b) With a help of a diagram explain and discuss life cycle hypothesis.
- The private consumption of Macroland is given by C=500+0.75Y and the private investment function is given by I=400−1000r, where r is the interest rate and Y is the GDP. The planned aggregate expenditure can therefore be written as PE=C+I=900+0.75Y−1000r. The equilibrium in the goods and services market happens when the planned expenditure is equal to the actual expenditure, or PE=Y Find the equilibrium GDP by solving the system of equations PE=900+0.75Y-1000r PE= Y for Y and PE. Note your solutions will depend on r! 1. Plot your solution for Y in a diagram measuring Y on the horizontal axis and r on the vertical axis. This curve is called the IS curve.Q8. For the data in the following table, the consumption function is C = 800 + 0.6(Y – T). Fill in the columns in the table and identify the equilibrium output. Output Net Taxes Disposable Income Consumption Saving Planned Investment Government Expenditure Planned AE Unplanned Inventory change 2100 100 300 400 2600 3100 3600 4100 4600 5100You are given the following information about a closed economy with no government:Consumption = 445 + 0.75Y Investment = 250 Calculate the value of autonomous spending.
- Q3. Real GDP Consumption Planned Investment Government Purchases Net Exports $5,000 $4,500 $500 $325 -125 6,000 5,300 $500 $325 -125 7,000 6,100 $500 $325 -125 8,000 6,900 $500 $325 -125 Answer the questions based on the table below. The values are in millions of dollars. What is the equilibrium level of real GDP? What is the MPC? If potential GDP is $7,000 million, is the economy at full employment? If not, what is the condition of the economy? If the economy is not at full employment, by how much should government spending increase so that the economy can move to the full employment level of GDP?In a closed economy, consumers spend $300 regardless of the level of income, and the marginal propensity to consume (MPC) is 0.75. Investment is equal to $200. The government spends $400 and collects $50 in taxes. The equilibrium level of GDP in this economy is $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.
