7. Marginal propensity to import and net exportsThe following graph shows net exports for a hypothetical country.U5050402020NET EXPORTS (Billions of dollars)1010-1020-20300400⑦?500600700REAL GDP (Billions of dollars)010020013andAccording to the graph, when the country is producing a real GDP of $400 billion, exports arefunction is equal to thethan imports. The slope of the net exportsand thus tells you that for every $1 increase in real GDP,do not change (because they are assumed to be autonomous with respect to real GDP).by

Q7) net exports is difference between the Exports and import, Exports are assumed to be fixed/…

Answered: 7. Marginal propensity to import and…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The following are a year's data for a hypothetical economy. Comsmption $400B, Government purchases $350B, GDPI $150B, Exports $150B, Imports $100B, Depreciation $50B. a) what is the value of GDP and NDP? b) what is the value of Net private Domestic investment ? c) suppose that in the next year exports increases to $175B, imports increase to 200B, and consumption falls to 350B. What will GDP be in that year?
Match each definition to the appropriate component of aggregate demand. Definition The sum of the expenditures of business firms on new plant, equipment, and software and of households on new homes The goods and services purchased by all levels of government The total amount spent by consumers on newly produced goods and services The difference between exports and imports ⒸNet exports O Government spending Consumer Expenditure Which of the following components represents the largest piece of aggregate demand? O Consumer expenditure O Investment spending O Which of the following components represents the smallest piece of aggregate demand? O Consumer expenditure O Government spending O Investment spending ONet exports Investment Spending Government Spending Net Exports O O O O
18. Deriving net exports By definition, net exports from Japan are equal to exports from Japan minus imports into Japan. In a hypothetical two-country world, imports into Japan are equal to exports from the United States. So the value for net exports from Japan is equal to exports from Japan minus exports from the United States. Graphically, at each exchange rate, the value for net exports is the horizontal distance from U.S. exports to Japanese exports. Use the graph input tool to answer the following questions. You will not be graded on any changes you make to this graph. (Note: To avoid dealing with decimal places, this calculator reports the price of yen in terms of dollars per 1,000 yen. That is, the price on the vertical axis is the dollar price of a 1,000-yen note instead of a single yen. As you have already seen, a price of 8 dollars per 1,000 yen is the same as 125 yen per dollar. Once you enter a value in a white field, the graph and any corresponding amounts in each grey…
4. What do we mean when we talk about the export base of a region? How does an increase in the export base affect total employment? How does this relate to the multiplier? What factors limit the size of the multiplier within cities?
4. Suppose that you are given the following data for the country of Trumpland: consumption net factor income from abroad 12,800 10,000 3,100 2,200 2,700 2,900 200 interest payments capital consumption allowance government spending on goods and services 2,400 2,900 3,200 wages investment exports imports profits rental payments 700 From the data provided, find a. GDP using the expenditure approach. b. GNP and NNP. c. NI using the income approach. d. statistical discrepancy. e. GDP using the income approach. (HINT: TrumRland is similar to the US economy for 2016, in billions of dollars.)
Question 41 The following equations describe the economy: C= 150 + 0.9Yd | = 150 G = 250 X 200 IM = 0.06Y T= 0.1Y At the equilibrium level of GDP, net exports are equal to a).-180 O b) - -20 Oc) 200 O d) 20 Next Page Previous Page Question 40 The following equations describe the economy: C = 150 + 0.9Y | = 150 G = 250 X 200 IM = 0.06Y T= 0.1Y In equilibrium GDP is equal to a) 3,000 b) 750 Oc) 3,750 O d) 7,500
Refer to the Table. Assume that this economy produces only two goods Good X and Good Y. The value for this economy's nominal GDP in year 3 is Year 1 Good X 60 Good Y 100 OA) $204. OB) $222. OC) $250. OD) $270. Production Year 2 80 110 Year 3 100 130 Year 1 $1.00 $0.80 Prices Year 2 $1.00 $0.90 Year 3 $1.40 $1.00
From the following data, determine the equilibrium level of real GDP.The equilibrium level of real GDP is ______________.
In the GDP equation, business spending is referred to as: O Consumption Investment O Government O Net Exports
U.S. durable goods orders boosted by aircraft The Commerce Department reported that orders for durable goods increased 2.1 percent in July. Orders for Boeing aircraft rebounded. Source: Financial Times, August 26, 2019 Explain the process by which an increase in durable goods orders at a constant price level changes equilibrium expenditure and real GDP. A planned increase in durable goods is an increase in planned investment. When planned investment increases, _______. A. the economy moves production into investment from consumption expenditure, government expenditure on goods and services, and exports. Real GDP decreases B. real GDP cannot change unless the price level also changes C. real GDP increases by an amount equal to the change in investment. Disposable income decreases to make up for the increase in investment so that the economy returns to its long-run equilibrium D. real GDP initially increases by an amount equal to the change in…
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QUESTION 21 What is the marginal propensity to consume? a. The ratio of the change in consumption to the change in national income O b. The proportion of national income that goes on consumption O c. The additional spending by a consumer when the price of a good falls O d. The additional revenue received by a firm when it attracts a new customer

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