You are given the following information about a model economy. The autonomous part of consumption is R100 billion. The marginal propensity to consume is equal to 0.8. Investment is R460 billion. Government purchases of goods and services are R400 billion. The tax rate is equal to 0.25. Imports are autonomous, and are equal to R347 billion, and exports are equal to R347 billion. The full employment level of income is estimated at R2 800 billion. The value of autonomous spending

You are given the following information about a model economy. The autonomous part of consumption is R100 billion. The marginal propensity to consume is equal to 0.8. Investment is R460 billion. Government purchases of goods and services are R400 billion. The tax rate is equal to 0.25. Imports are autonomous, and are equal to R347 billion, and exports are equal to R347 billion. The full employment level of income is estimated at R2 800 billion. The value of autonomous spending

Macroeconomics: Principles and Policy (MindTap Course List)

13th Edition

ISBN:9781305280601

Author:William J. Baumol, Alan S. Blinder

Publisher:William J. Baumol, Alan S. Blinder

Chapter8: Aggregate Demand And The Powerful Consumer

Section: Chapter Questions

Problem 8DQ

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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).
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In Eiffel Land, the autonomous consumption is 2000, the mpc is 0.6, net taxes are 200, planned investment is 5000, government spending is 2500 and net exports are 300. What is the planned aggregate expenditure of the economy? Question 20 options: 1) 1880 + 0.6Y 2) 9680+0.6Y 3) 9680+0.4Y 4) 9800+0.6Y
Consider an economy in which autonomous consumption, planned autonomous investment, autonomous government expenditure, autonomous taxes, and the marginal propensity to consume are given (there are no net exports). Autonomous consumer spending = $3,000 Ip = $5,000 G = $3,000 T = $4,000 MPC = .75 (a) What is the level of C when Y = $19,000? I need help to know how to calculate this.
Title You are given the following information about the Canadian economy: Autonomous consumption... Description You are given the following information about the Canadian economy: Autonomous consumption expenditure is $50 billion, investment is $200 billion, and government expenditure is $250 billion. The marginal propensity to consume is 0.7 and net taxes are $250 billion—net taxes are assumed to be constant and not vary with income. Exports are $500 billion and imports are $450 billion. a. What is the consumption function? b. What is the equation of the AE curve? c. Calculate equilibrium expenditure. d. Calculate the multiplier. e. If investment decreases to 150 billion, what is the change in equilibrium expenditure? f. Describe the process in e that moves the economy to its new equilibrium expenditure.
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Find the consumption expenditure from the given information:- Autonomous consumption- 100 Marginal propensity to consume - 0.70 National income - 1000
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1) Following is information for the economy of Sparkle. All units are milliondollars. Their autonomous consumption is $700, and the marginal propensity to consume is 0.8.Investment spending is constant at $380, and government expenditure is constant at $300.Exports are constant at $500, and imports are constant at $800. Net taxes are constant at $100.Calculate and state your answers for the following questions.a) What is the value of consumption in this economy when the real GDP is $1100?b) What is the value of autonomous aggregate planned expenditure i.e. AE0?c) What is the value of equilibrium aggregate expenditure for this economy?d) What is the value of unplanned changes in the inventory investment when real GDP is$4000?e) What is the size of the multiplier in this economy?f) If investment spending increases by $50, what would be the value of the change in theequilibrium real GDP?
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