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- Please give me correct answer and full explanation Question 9 Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.Concerning the government budget constraint and the impact of cutting taxes on investment - if the government cuts taxes and funds this tax cut by cutting government spending in the same period is it right to say that government saving doesn't change but private saving will as consumers will receive this permanent tax cut - thereby increasing the income flow increasing consumption.4. (Nominal GDP) Which of the following is a necessary condition-something that must occur-for nominal GDP to rise? Explain your answers. A.Actual production must increase. b. The price level must increase. c. Real GDP must increase. d. Both the price level and actual production must increase. e. Either the price level or real GDP must increase
- 32. Giving reason explain how should the following be treated in estimating Gross Domestic Product at Market Price ? (i) Fees to a mechanic paid by a firm. (ii) Interest paid by an individual on a car loan taken from a bank. (iii) Expenditure on purchasing a car for use by a firm5. Macroeconomic equilibrium and the ranges of the aggregate supply curve The following graph shows the aggregate demand (AD₁) and aggregate supply (AS) curves for a hypothetical economy with full-employment output. of $11 trillion. PRICE LEVEL (CPI) 130 125- 120 115 110 105 100 95 90 + 8.0 8.5 AD₁ AS 9.0 10.5 9.5 10,0 REAL GDP (Trillions of dollars) 11.0 11.5 12.0 AD₂ Macro Eq 2 Suppose the level of real GDP supplied by firms is $10.5 trillion and the price level is 105. In this case, the quantity of real GDP supplied is the real GDP demanded at a price level of 105, and firms will experience an unplanned respond to the change in inventories by producing GDP of in inventories. Firms will output until the economy reaches macroeconomic equilibrium at a price level of and real The decrease in aggregate demand leads to a movement along the price level to Suppose consumers and businesses become less optimistic about future economic conditions, causing the aggregate demand curve to decrease…(Table) Suppose a loaf of bread goes through the following stages of production, with the values noted at the end of each stage. Stage 1. Farmer's wheat 2. Miller's flour Value $0.65 $1.20 $1.80 $2.65 3. Baker's bread 4. Grocer's bread The sale of one loaf of bread adds to GDP. $6.30 $2.65 $5.65 $4.45
- Problem 1 The table below contains data about a hypothetical economy comprised of three firms. Value of sales Intermediate goods Wages Interest payments Rent Profit Total expenditure by firm Value added by firm Ore Firm ● 4200 (ore) 0 2000 1000 200 1000 4200 Steel Firm 9000 (steel) 4200 (iron ore) 3700 600 300 200 9000 • Calculate the value added by firm; ● Calculate the total factor income; ? Calculate the GDP of the economy: 1) Using the national spending approach; 2) Factor income approach; 3) Value added approach. Car Firm 21500 (car) 9000 (steel) 10000 1000 500 1000 21500 ? Total factor income ? ? ? ?1. (Table: Consumption for Four Consumers) Use Table: Consumption for Four Consumers. Construct the aggregate consumption function. Table: Consumption for Four Customers Cardi's Santiago's Consumption Disposable Nicki's Manuel's Income Consumption Consumption Consumption $0 $500 $1,000 $800 $1,200 1,000 1,000 1,900 1,600 1,800 2,000 1,500 2,800 2,400 2,400 3,000 2,000 3,700 3,200 3,000 4,000 2,500 4,600 4,000 3,600 c. What is the MPC according to the aggregate consumption function? How is that related to the MPS?41. (Table: Three-Good Economy I) Suppose an economy produces only the three finished goods shown in the table. The table gives information on the quantities produced and the prices of goods sold in 2008 and 2009. If prices in 2008 are used to calculate real GDP, what is the real GDP in 2008? Product Computers Pizzas Burgers Quantity (2008) 25 90 180 A) $20,134 B) $21,134 C) $25,260 D) $26,260 Price (2008) $800.00 9.00 1.80 Quantity (2009) 30 100 200 21134-31,400 Price (2009) $1,000.00 10.00 2.00
- (Changes in Government Purchases) Assume that government purchases decrease by $10 billion, with other factors held constant, including the price level. Calculate the change in the level of real GDP demanded for each of the following values of the MPC. Then, calculate the change if the government, instead of reducing its purchases, increased autonomous net taxes by $10 billion. 0.9 0.8 0.75 0.66. Nonprice-level determinants of aggregate supply The lowing graph shows an increase in aggregate supply (AS) in a hypothetical economy. Specifically, aggregate supply shifts to the right from AS1 to S₂, causing the quantity of output supplied at a price level of 125 to rise from $250 billion to $350 billion. PRICE LEVEL (CPI) 175 150 125 100 75 50 25 0 0 50 AS, 100 150 200 250 REAL GDP (Billions of dollars) 300 350 AS₂ 400 ©9. Deriving aggregate demand from the income-expenditure model The following graph shows three planned expenditure lines for an economy at three different price levels. PE120 corresponds to the price level of 120; PE100 corresponds to the price level of 100; PE140 corresponds to the price level of 140. The black line (which starts in the bottom left corner) is a 45-degree line illustrating the set of points for which real income and planned expenditure are equal. 800 PE, (P = 100) 700 PE, (P =120) 600 PE, (P =140) Slope: 0.5 500 Y-Intercept: 200 400 300 100 100 200 300 400 500 600 700 800 REAL INCOME (Billions of dollars) The level of equilibrium output at a price level of 100, is On the following graph, plot the aggregate demand curve that results from varying the price level from 100 to 120 to 140, holding all else equal. Hint: Real income and the quantity of output are equivalent. For example, a real income of $100 billion is the same as a quantity of output of $100 billion. PLANNED…