Pearson eText Economics -- Instant Access (Pearson+)
13th Edition
ISBN: 9780136879459
Author: Michael Parkin
Publisher: PEARSON+
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Question
Chapter 28, Problem 3SPA
(a)
To determine
Identify the aggregate planned expenditure when the real GDP is $6 billion.
(b)
To determine
Identify the impact on the inventories when the real GDP is $4 billion.
(c)
To determine
Identify the impact on the inventories when the real GDP is $6 billion.
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Answer the following questions, which relate to the aggregate expenditures model:a. If Ca is $100, Ig is $50, Xn is -$10, and G is $30, what is the economy’s equilibrium GDP?b. If real GDP in an economy is currently $200, Ca is $100, Ig is $50, Xn is -$10, and G is $30, will the economy’s real GDP rise, fall, or stay the same?c. Suppose that full-employment (and full-capacity) output in an economy is $200. If Ca is $150, Ig is $50, Xn is -$10, and G is $30, what will be the macroeconomic result?
Using the table below to answer the following questions. Assume all values represent trillions of dollars.
Construct a graph of the Aggregate planned expenditure
What is the equilibrium expenditure?
Explain what happens at a real GDP of $4 trillion dollars. (Note the aggregate
expenditures and the effects on inventories)
What are your total autonomous expenditures?
What is the marginal propensity to consume?
Ignoring imports and income taxes, what is the multiplier?
If investment increases by $1.5 trillion, what is the change in real GDP?
Use the diagram to the right to answer the following:
a. The equilibrium value of real GDP is $ trillion. (Enter your response as a whole number.)
b. The MPC is equal to
(Enter your response rounded to two decimal places.)
c. The multiplier is equal to
(Enter your response rounded to one decimal place.)
d. What is the value of unplanned changes in inventories when real GDP has each of the
following values? (Enter your responses rounded to one decimal place and include a minus sign if
necessary.)
GDP
$10 trillion
$12 trillion
$14 trillion
Unplanned Inventories
trillion
trillion
trillion
C
Aggregate Expenditure, AE ($, trillions)
24.0-
22.0
≈ ≈ ¦ CO
20.0-
18.0-
16.0-
14.0-
12.0+
10.0-
8.0-
6.0-
4.0-
2.0-
0.0-
O.
13.6
12.0
10.4
0
45°
-~
2 4
AE
10:12:14
10 12 14 16 18 20 22 24
6
8
Real GDP, Y ($, trillions)
G
Chapter 28 Solutions
Pearson eText Economics -- Instant Access (Pearson+)
Ch. 28.1 - Prob. 1RQCh. 28.1 - Prob. 2RQCh. 28.1 - Prob. 3RQCh. 28.2 - Prob. 1RQCh. 28.2 - Prob. 2RQCh. 28.2 - Prob. 3RQCh. 28.2 - Prob. 4RQCh. 28.3 - Prob. 1RQCh. 28.3 - Prob. 2RQCh. 28.3 - Prob. 3RQ
Ch. 28.4 - Prob. 1RQCh. 28.4 - Prob. 2RQCh. 28.4 - Prob. 3RQCh. 28.4 - Prob. 4RQCh. 28 - Prob. 1SPACh. 28 - Prob. 2SPACh. 28 - Prob. 3SPACh. 28 - Prob. 4SPACh. 28 - Prob. 5SPACh. 28 - Prob. 6SPACh. 28 - Prob. 7SPACh. 28 - Prob. 8SPACh. 28 - Prob. 9SPACh. 28 - Prob. 10SPACh. 28 - Prob. 11SPACh. 28 - Prob. 12SPACh. 28 - Prob. 13SPACh. 28 - Prob. 14SPACh. 28 - Prob. 15APACh. 28 - Prob. 16APACh. 28 - Prob. 17APACh. 28 - Prob. 18APACh. 28 - Prob. 19APACh. 28 - Prob. 20APACh. 28 - Prob. 21APACh. 28 - Prob. 22APACh. 28 - Prob. 23APACh. 28 - Prob. 24APACh. 28 - Prob. 25APACh. 28 - Prob. 26APACh. 28 - Prob. 27APACh. 28 - Prob. 28APACh. 28 - Prob. 29APACh. 28 - Prob. 30APACh. 28 - Prob. 31APACh. 28 - Prob. 32APACh. 28 - Prob. 33APACh. 28 - Prob. 34APA
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