# 1. Aggregate Expenditure and IncomeThe following table shows consumption (C), investment (I), government purchases (G), and net exports (X - IM) in a hypothetical economy for various levels of real GDP (Y). Assume that the price level remains unchanged at all levels of income. All figures are in billions of dollars.**Compute total expenditure for each income level, and fill in the last column in the following table.**| Y | C | I | G | X - IM | Total Expenditure ||-----|-----|-----|-----|--------|-------------------|| 500 | 525 | 250 | 150 | -200 | || 600 | 550 | 250 | 150 | -200 | || 700 | 575 | 250 | 150 | -200 | || 800 | 600 | 250 | 150 | -200 | || 900 | 625 | 250 | 150 | -200 | |The following graph shows income (Y) on the horizontal axis and total expenditure (TE) on the vertical axis. The grey line represents a 45-degree $Y = TE$ line.Use the blue points (circle symbol) to plot the total expenditure line for this economy at an income of $500 billion, $600 billion, $700 billion, $800 billion, and $900 billion.**Note:** Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.The graph includes:- **Axes:** The horizontal axis represents income (Y) in billions of dollars, while the vertical axis represents total expenditure (TE) in billions of dollars.- **Grey Line:** A 45-degree line indicating $Y = TE$.- **Points and Line:** Indicating total expenditure at various income levels, which can be plotted using given data points.- **Labels:** "TE line" marker and an "Equilibrium GDP" point at the intersection of the plotted line with the 45-degree line. **Graph Explanation:**This image contains a graph depicting the relationship between Real GDP and Real Expenditure. The x-axis represents Real GDP in billions of dollars, ranging from 400 to 1000. The y-axis shows Real Expenditure, also in billions of dollars, ranging from 400 to 1000. A straight line, labeled as the "TE line" (Total Expenditure line), runs diagonally from the bottom left to the top right, indicating a direct relationship between Real GDP and Real Expenditure.A point marked "Equilibrium GDP" with a plus symbol is intended to be placed where total expenditure equals total income, indicating the equilibrium in the economy.**Instructions and Notes:**- **Plot Instructions:** Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. - **Use of Black Point:** The black point (plus symbol) is used to indicate the equilibrium in this economy, where total expenditure and income are equal.- **Drop Lines:** Dashed drop lines will automatically extend to both axes.**Scenario Analysis:**- **Current Real GDP:** Suppose the real GDP is currently $500 billion. Assuming the price level remains constant, this would mean that [dropdown needed], which would send a signal to firms to [dropdown needed].- **Marginal Propensity to Consume (MPC):** The MPC for this economy is [dropdown needed], and the oversimplified multiplier for this economy equals [dropdown needed].

The current value of all finished goods and services in the economy is defined as aggregate…

1. Aggregate expenditure and income The following table shows consumption (C), investment (I), government purchases (G), and net exports (X-IM) in a hypothetical economy for various levels of real GDP (Y). Assume that the price level remains unchanged at all levels of income. All figures are in billions of dollars. Compute total expenditure for each income level, and fill in the last column in the following table. Y C I G X-IM Total Expenditure 500 525 250 150 -200 600 550 250 150 -200 700 575 250 150 -200 800 600 250 150 900 625 250 150 -200 -200 1000 C The following graph shows income (Y) on the horizontal axis and total expenditure (TE) on the vertical axis. The grey line represents a 45-degree (Y = TE) line. Use the blue points (circle symbol) to plot the total expenditure line for this economy at an income of $500 billion, $600 billion, $700 billion, $800 billion, and $900 billion. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.

1. Aggregate expenditure and income The following table shows consumption (C), investment (I), government purchases (G), and net exports (X-IM) in a hypothetical economy for various levels of real GDP (Y). Assume that the price level remains unchanged at all levels of income. All figures are in billions of dollars. Compute total expenditure for each income level, and fill in the last column in the following table. Y C I G X-IM Total Expenditure 500 525 250 150 -200 600 550 250 150 -200 700 575 250 150 -200 800 600 250 150 900 625 250 150 -200 -200 1000 C The following graph shows income (Y) on the horizontal axis and total expenditure (TE) on the vertical axis. The grey line represents a 45-degree (Y = TE) line. Use the blue points (circle symbol) to plot the total expenditure line for this economy at an income of $500 billion, $600 billion, $700 billion, $800 billion, and $900 billion. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Refer to the data for 2019 below to answer the following questions: The Equivalence of Expenditure and Income (in Billions of Dollars) Expenditure C: Consumer goods and services 1: Investment in plants, equipment, and inventory G: Government goods and services X: Exports M: Imports GDP: Total value of output % b. Corporate profits? $14,561 % 3,744 3,754 2,504 Wages and salaries Corporate profits Proprietors' income Instructions: Enter your responses as a percentage rounded to one decimal place. What share of U.S. total income in 2019 consisted of a. Wages and salaries? Income Rents Interest Taxes on output and imports Depreciation Statistical discrepancy (3,136) $21,427 = Total value of income $11,434 2,075 1,658 778 645 1,494 3,463 (120) $21,427
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