1. Aggregate expenditures and incomeThe following table shows consumption (C), investment (1), government spending (G), and net exports (X-M) in a hypothetical economy for variouslevels of real GDP (Y). Assume that the price level remains unchanged at all levels of income. All figures are in billions of dollars.Compute aggregate expenditures for each income level and fill in the last column In the following table.YсG500525250 150600 550 250 150575250 150600 250 150 -200900 625 250 150 -200700800AL AGGREGATE EXPENDITURES (Billions of dollars)The following graph shows real GDP on the horizontal axis and aggregate expenditures (AE) on the vertical axis. The orange line (square symbols)represents a 45-degree (Y-AE) line.1000Use the blue points (circle symbol) to plot the aggregate expenditures line for this economy. Line segments will automatically connect the points.900300I700X-M Aggregate Expenditures-200725-200750775800825600500 +-200AE line*+Equilibrium GDP(?) Use the blue points (circle symbol) to plot the aggregate expenditures line for this economy. Line segments will automatically connect the points.REAL AGGREGATE EXPENDITURES (Billions of dollars)1000900800700600500400400500600700800REAL GDP (Billions of dollars)9001000OAE line3+Equilibrium GDP?Place the black point (cross symbol) where the aggregate expenditures line intersects the 45-degree line. Dashed drop lines will automatically extendto both axes.The equilibrium output at this price level is equal to $800 billion.Suppose real GDP is currently $900 billion. Assuming the price level remains constant, this would mean that, which would send a signal to firms toThe marginal propensity to consume (MPC) for this economy is 0.25 and the spending multiplier for this economy is equal to 1.3 ▼

Aggregate expenditure refers to the entire amount of spending via all sectors of an economy on final…

1. Aggregate expenditures and income The following table shows consumption (C), investment (I), government spending (G), and net exports (X-M) 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 aggregate expenditures for each income level and fill in the last column In the following table. X-M Aggregate Expenditures -200 725 750 775 800 825 Y C 500 525 250 150 600 550 250 150 -200 700 575 250 150 -200 800 600 250 150 900 625 250 150 I G -200 -200 The following graph shows real GDP on the horizontal axis and aggregate expenditures (AE) on the vertical axis. The orange line (square symbols)

1. Aggregate expenditures and income The following table shows consumption (C), investment (I), government spending (G), and net exports (X-M) 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 aggregate expenditures for each income level and fill in the last column In the following table. X-M Aggregate Expenditures -200 725 750 775 800 825 Y C 500 525 250 150 600 550 250 150 -200 700 575 250 150 -200 800 600 250 150 900 625 250 150 I G -200 -200 The following graph shows real GDP on the horizontal axis and aggregate expenditures (AE) on the vertical axis. The orange line (square symbols)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume that imports into an economy equal $125 billion and exports equal $75 billion. Use the information in the following table, and information given on imports and exports, to determine the level of unplanned inventory at each level of real GDP. Possible Levels of Employment (Millions of workers) 40 45 50 55 60 65 70 Employment, Output, Consumption, and Unplanned Inventory Real GDP (Output) Equals Disposable Income (Billions of dollars) of net exports, the equilibrium real GDP is $ 325 375 425 475 525 575 625 Consumption (Billions of dollars) 300 325 350 375 400 425 450 Investment (Billions of dollars) 125 billion, and the equilibrium employment level is 125 125 125 125 125 125 Given the values of imports and exports, the effect of net exports (relative to the case where net exports are excluded) on this economy is to unplanned inventory investment at all levels of real GDP and to the level of real GDP at equilibrium. With the inclusion millions workers. Unplanned Inventory…
Briefly describe what will the US aggregate expenditure be affected (i.e., increase or decrease) by each of the following factors: (1) A decrease in US Government spending (2) An increase in US Consumers' spending (3) A decrease in US Exports (4) An increase in US Imports (5) US dollar appreciates (6) US interest rate becomes higher than other countries
Calculate total GDP for this economy given the following components of demand. Round your answer to the nearest tenth and enter the value in trillions of dollars. Components of GDP on the Demand Side (in trillions of dollars) Consumption Investment Government spending Exports Imports Provide your answer below: trillion Total GDP 12.9 3.8 4.2 3.0 4.2 ?
Indicate whether each of the following affect consumption spending (C), investment spending (I), government spending (G), net export spending (NX), or none of the above (N). Enter only the letter given in parenthesis. Carmax sells a three year old car to John The government sends a social security payment to your grandfather John spends his social security check on a new computer Publix buys 4 new computers You pay your tuition to UCF
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Write out and explain the GDP and Aggregate Expenditure identity equations.
Use the following table to answer the question below for an economy that has no government, no international trade or any association with other countries: Consumption (billions) Level of Output (billions) $240 $260 $280 $300 $320 $340 $360 $340 $380 $356 $400 $372 If gross investment is $4 billion, the equilibrium level of GDP (output) will be: a) $340 b) $280 Oc) $260 $244 $260 $276 $292 $308 $324 d) $360