9. Given that the consumption function is C = 10 + 0.3Yd, where yd isdisposable income, while the government imposes a RM10 tax for everyRM100 income earned and investment and government expenditure are 30and 20 respectively. Compute the national income equilibrium usingaggregate expenditure approacha.47.24b.82.19c.53.22d.75.98

The objective of the question is to calculate the national income equilibrium using the aggregate…

Answered: 9. Given that the consumption function…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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14. Find the equilibrium level of GDP in an economy in which investment is always 200 and the consumption function is C = 120 + 0.6Y. 7000 800 700 8000
8. The income-expenditure model Consider a small economy that is closed to trade, so its net exports are equal to zero. Suppose that the economy has the following consumption function, where C is consumption, Y is real GDP, I is investment, G is government purchases, and T stands for net taxes: C = 15+0.75 x (Y-T) Suppose G = $90 billion, 1 = $60 billion, and T = $20 billion. Given the consumption function and the fact that for a closed economy total expenditure can be calculated as Y=C+I+G, the equilibrium output level is equal to 5 billion. Suppose the government purchases are increased by $50 billion. The new equilibrium level of output will be equal to Based on the effect of the change in government purchases on equilibrium output, you can tell that this economy's spending multiplier is equal to
Please no written by hand and no emage Suppose that in the economy under consideration the consumption function can be written as C = 200 + .8(Y – T). Furthermore, you know that taxes are autonomous and equal to $10. Now, suppose that investment spending is equal to $50 at every level of disposable income and government spending is constant and equal to $100 at every level of disposable income, suppose that (X – M) is constant and equal to $20 at every level of disposable income. (a)Draw a graph of the consumption function with respect to disposable income. Measure/show consumption spending on the vertical axis and disposable income on the horizontal axis (b) Calculate equilibrium national income Ye from the information given. (c) From the information given above is the government running a deficit or surplus budget? Explain why. (d) Full employment output in this economy (Yf) is equal to $2000 what do you predict is happening to inventories if the full employment level of output is…
O Macmillan Learning The graph shows the income-expenditure model for the country of Desireland, where AE represents aggregate expenditure. The Desirish government wants to stimulate the economy owing to a slowdown in economic activity and, as such, decides to increase infrastructure spending by $7.65 billion. Show the impact of this extra spending given a marginal propensity to consume (MPC) of 0.7 and a total tax take of 30%, for any changes in GDP. In this example, assume that there is no international trade or inflation, and that interest rates are fixed. Planned aggregate spending (in billions of dollars) 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 0 01- 5 10 15 20 25 30 35 40 45 50 Real GDP (in billions of dollars) 45 degree line A new socialist government is elected to Desireland and decides to increase direct spending even more, to total of $9.7 billion. What will be the total change in real GDP? Please provide the answer to the nearest whole billion. Planned AE 55 60 65 70…
From the table below answer the following questions Y C I G AE 0 20 15 25 100 100 15 25 200 180 15 25 300 260 15 25 400 340 15 25 500 420 15 25 1- What is the value of autonomous Consumption? 2- What is the value of new equilibrium if government purchases increase by $100? 3- What is the value of equilibrium consumption? 4- What is the value of autonomous Aggregate Expenditure?
4. Planned expenditure and income The following table shows consumption (C), investment spending (I), and government purchases (G), in a hypothetical economy for various levels of income. Also assume that there is an income tax rate of 25%, that base consumption is $100 billion, and that the MPC is 0.333, or 1/3. This economy is closed, with no international trade, therefore net exports are equal to zero and should not be considered. Use the given information to fill in disposable income, consumption, and planned expenditures in the following table. Income: Real Disposable (After Tax) Planned GDP Income C I, G Expenditures (Billions of (Billions of dollars) (Billions of (Billions of (Billions of (Billions of dollars) dollars) dollars) dollars) dollars) 100 50 150 100 50 150 200 50 150 300 50 150 400 50 150 500 50 150
12:15 e itc.birzeit.edu 1-Complete the accompanying table. Level of output and income Consumption Saving АРС (GDP = DI) $110 -$15 135 180 15 205 30 230 45 255 60 280 75 305 90 330 105 (a) What is the break-even level of income? How is it possible for households to dissave at very low-income levels? (b) If the proportion of total income consumed decreases and the proportion saved increases as income rises, explain how the MPC and MPS can be constant at various levels of income. II
Hello. Can you please assist on the following questions below. Use the information below to answer the questions below.C = 400 + 0.6YI = 500Q.1 Calculate autonomous spending. Q.2 Calculate the equilibrium level of income. Q.3 Illustrate with the aid of a diagram the equilibrium level incomecalculated in Q.2
2. The consumption function Consider a country with the national income of $12 billion, the amount of taxes paid by households of $3 billion, and household consumption of $7 billion. Suppose that the marginal propensity to consume (MPC) is 0.75. On the following graph, use the blue line (circle symbol) to plot the economy's consumption function. Hint: You should plot the first point where household consumption equals $7 billion. Then, plot the second point when real disposable income rises by $4 billion. REAL CONSUMPTION (Billions of dollars) 20 18 16 + 14 12 10 0 0 2 4 6 8 10 12 14 16 18 20 REAL DISPOSABLE INCOME (Billions of dollars) -0 O $7.75 billion O $9.75 billion O $7.5 billion O $10.75 billion Consumption Function (?) Suppose now that country's national income increases to $13 billion. Assuming the amount paid in taxes is fixed at $3 billion and MPC= 0.75, what will be the new household consumption?
Refer to the information provided in Table 8.1 .below to answer the questions that follow Table 8.1 Aggregate Income ($ billion) Aggregate Consumption ($billion) 80 50 125 100 170 Q 150 215 200 260 Refer to Table 8.1. Assuming society's MPC is constant at an aggregate of income of $300, aggregate consumption would be :Select one .a. $425 .b. $305 .c. $325 .d. $350
2. In an open economy, given the Consumption = 50+ 0.6Y Investment = 120 Government expenditure = 70 Tax = 20 Net export = -10 Calculate the national income equilibrium using aggregate expenditure approach. a.545 b.363.33 c.417.47 d. 230

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