a. Assuming the level of investment is $15 billion and independent of the level of total output, complete the following table and determine the equilibrium levels of output and employment in this private closed economy. Instructions: In the table below, enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Possible Levels of Employment, Millions 35 40 45 50 55 60 65 70 75 Equilibrium GDP = $ Equilibrium level of employment = Real Domestic Output Consumption, Billions Saving, Billions (GDP = DI), Billions $230 250 270 290 310 330 350 370 390 MPC = MPS = billion b. What are the values of the MPC and MPS? million $239 255 Instructions: In part b, enter your answers rounded to 1 decimal place. 271 287 303 319 335 351 367

a. Assuming the level of investment is $15 billion and independent of the level of total output, complete the following table and determine the equilibrium levels of output and employment in this private closed economy. Instructions: In the table below, enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Possible Levels of Employment, Millions 35 40 45 50 55 60 65 70 75 Equilibrium GDP = $ Equilibrium level of employment = Real Domestic Output Consumption, Billions Saving, Billions (GDP = DI), Billions $230 250 270 290 310 330 350 370 390 MPC = MPS = billion b. What are the values of the MPC and MPS? million $239 255 Instructions: In part b, enter your answers rounded to 1 decimal place. 271 287 303 319 335 351 367

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

a. Assuming the level of investment is $15 billion and independent of the level of total output, complete the following table and
determine the equilibrium levels of output and employment in this private closed economy.
Instructions: In the table below, enter your answers as a whole number. If you are entering any negative numbers be sure to include a
negative sign (-) in front of those numbers.
Possible Levels of
Employment, Millions
35
40
45
50
55
60
65
70
75
Equilibrium GDP = $
Equilibrium level of employment =
Real Domestic Output
(GDP = DI), Billions
$230
250
270
290
310
330
350
370
390
MPC =
MPS =
billion
Consumption, Billions Saving, Billions
b. What are the values of the MPC and MPS?
million
Instructions: In part b, enter your answers rounded to 1 decimal place.
$239
255
271
287
303
319
335
351
367

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2
The Image attached titled Table 1 is data for a hypothetical private-closed economy. Use the information in the Table 1 to analyze aggregate expenditures (AE) model attached (Figure 1. Equilibrium in a Private Closed Economy). Question 1 Identify the mistake and explain why the graph of the aggregate expenditures line does not correctly illustrate the economy's equilibrium. Question 2 Chart the aggregate expenditures (AE) model in Excel using the data from Table 1: A Private Closed Economy. Remember, the 45degree line (also known as the Keynesian Cross) is a tool that shows how differences in aggregate expenditures and real GDP can affect business inventories which will affect future levels of real GDP. Aggregate expenditure and GDP are both function of consumption, investment, government spending, and net exports. So, the equations for the two are identical: Y = C + I + G + NX, and AE (aggregate expenditure) = C + I + G + NX For private closed economy the equation…
27. Given this diagram, if Investment spending were to be reduced to 10, what would be the resulting equilibrium income? 28. Given this diagram, if G (government purchases of goods and services) were increased to 35, what would be the resulting equilibrium level of income?
1
The following table provides data for output (real GDP) and saving. a. Fill in the missing numbers (gray-shaded cells) in the table. Instructions: In the table, enter your answers for consumption as a whole number. Round your answers for APC and APS to 3 decimal places. Round your answers for MPC and MPS to 1 decimal place. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Level of Output and Income (GDP = DI) Consumption Saving АРС APS MPC MPS 496 -0.033 -0.015 $480 $-16 1.033 520 528 -8 1.015 560 560 1.000 0.000 592 624 600 0.987 0.013 640 16 0.975 0.025 680 656 24 0.965 0.035 720 688 32 0.956 0.044 760 720 40 0.947 0.053 800 752 48 0.940 0.060
se the information in the table to answer the following questions All numbers are in billions of 2012 dollars Real GDP (Y) $10,000 $11,000 $12,000 Consumption (C) $8.500 $0,300 $10,100 $10,000 $11.700 Planned Investment (1) $1,000 $1,000 $1,000 $13,000 $14,000 The equilibrium level of GDP is $ 12000 billion. The MPC is 0.8 (enter your response to two decimal places) Suppose that not exports increase by $200 billion. Using the multiplier formula, determine the new level of GDP A $200 billion increase in net exports leads to a change in spending of spillon, so the new level of GDP will be $billion $1,000 $1,000 Government Purchases (G) $1,400 $1,400 $1,400 $1,400 $1,400 Net Exports (NX) -$500 -$500 $500 -$500 -$500
Based on the chart in question 8.06, if investment rises from $120 to $130 and the price level is fixed. By how much will the equilibrium real GDP increase?
Table 11-6 Government Real GDP Consumption Investment Purchases 1 Net Exports $1,000 $1,000 $100 $150 -$50 2 3 2,000 1,900 100 150 -50 3,000 2,800 100 150 -50 4 4,000 3,700 100 150 -50 Using the table above, answer the following question. The numbers in the table are in billions of dollars. 13) Refer to Table 11-6. What is the value of MPC? A) 0.2 B) 0.5 C) 0.75 D0.9 E) None of the above