A key result of the equilibrium aggregate expenditure model is that it: Question 27 options: a shows how classical notion that the economy will always tend towards natural rate GDP is correct. b can illustrate how an economy can be at an equilibrium that is below natural rate GDP. c illustrates how the government always moves us towards equilibrium GDP. d can explain why the economy should always be at natural rate GDP.

A key result of the equilibrium aggregate expenditure model is that it: Question 27 options: a shows how classical notion that the economy will always tend towards natural rate GDP is correct. b can illustrate how an economy can be at an equilibrium that is below natural rate GDP. c illustrates how the government always moves us towards equilibrium GDP. d can explain why the economy should always be at natural rate GDP.

MACROECONOMICS FOR TODAY

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Chapter9: The Keynesian Model In Action

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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…
Multiplier Effect a. During a recessionary gap, is the goal to increase or decrease the equilibrium GDP? Will the change in spending be greater than, less than or equal to the change in the equilibrium GDP? b. c. In a given economy with an MPC of 0.8, the equilibrium GDP equals $630,000. If G increases by $70000, solve for the new equilibrium GDP that will result. In a given economy, with an equilibrium GDP of $280,000 both government purchases and taxes increase by $10,000. Solve for the new equilibrium GDP that will result from these two changes.
THE AGGREGATE EXPENDITURE MODEL (IN THE SHORT RUN)YOU MUST SHOW YOUR CALCULATIONS IN THE SPACE BELOWFOR THE NEXT PROBLEM USE THE FOLLOWING FORMULA:CHANGE IN GDP = [ 1 / (1-MPC) ] * CHANGE IN GInitially, the economy is producing $13 trillion in goods and services and the government is spending $2 trillion.Then the government decides to increase its spending to $2.7 trillion. Compute the new equilibrium level of output. Assume that the marginal propensity to consume is 0.7 (MPC=0.7).
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Derive the consumption function and use this relation in the aggregate demand function to derivean equation for the equilibrium in the goods market . Why the AD line is upward sloping?Suppose the government spending falls by 100 and in this case marginal propensity to consumeis 0.8. what is the value of change in output. Draw a diagram to show the shift in AD line due tothis change in government spending and output.
Answer the following questions, which relate to the aggregate expenditures model: Instructions: Enter your answer as a whole number. a. If Ca is $100, lg is $50, X, is -$10, and Gis $30, what is the economy's equilibrium GDP? 2$ b. If real GDP in an economy is currently $20o, Ca is $100, lg is $50, X, is -$10, and Gis $30, will the economy's real GDP rise, fall, or stay the same? |(Click to select) c. Suppose that full-employment (and full-capacity) output in an economy is $200. If Cą is $150, Ig is $50, Xn is -$10, and Gis $30, what will be the macroeconomic result? O There will be an inflationary expenditure gap and employment levels will be above the full-employment level. O There will be an inflationary expenditure gap and employment levels will be below the full-employment level.
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please anwer ponit no:- 4, 3 and 2. (It will be nice if u answer all points)
Please answer d and e only Thank you
LIBR The Aggregate Expenditure or Keynesian macroeconomics model is based upon the theory that the level of GDP in the economy is determined by the level of aggregate spending. True False
the question in the attached image
Problem 1 Consider the Aggregate expenditure model. Where:AD = C + I + G + NX where I, G, and NX are all autonomous.C = C + c∗(Y + T R − T A where T A = tY with t ∈ [0, 1] is the proportional tax rate and c∗ ∈ (0, 1) is the marginal propensity to consume.a. Using the information above, solve for AD. Combineall the autonomous terms into one term, A. b. In an (x, y) plane, where Y is on the horizontal axis and AD is on thevertical axis, illustrate the AD curve you derived above along with the 45degreeline.Make sure to explain how you got the Y-intercept and solve for the slope. c. Provide an economic interpretation for the slope of the AD function. d. Solve for the equilibrium level of output and show what happens to outputwhen G increases by 1 unit. That is, what is ∆Y ? Show your result graphicallyand explain how the AD curves shifts and by how much. Briefly explain. e) Suppose that ∆G = −1 and ∆T R = +2. Show what happens to theequilibrium level of output. Explain your result

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a	shows how classical notion that the economy will always tend towards natural rate GDP is correct.
b	can illustrate how an economy can be at an equilibrium that is below natural rate GDP.
c	illustrates how the government always moves us towards equilibrium GDP.
d	can explain why the economy should always be at natural rate GDP.