The rate of output and planned expenditures for the economy of timbuktu are shown in the following table:Total Output(Real GDP in Billion dollars)Planned Aggregate Expenditures (Two-sector Economy) (in billions)5,0005,2505,5005,5006,0005,7506,5006,0007,0006,250a. If the economy's full employment rate of output is 6.0 trillion, what will happen to the unemployment rate assuming that it will persist into future?b. What would happen to the equilibrium level of output/income if there will be an autonomous increase in investment of 250 billion?

The full employment rate of output would be the long run output which would cause the long run rate…

Answered: a. If the economy's full employment…

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 rate of output and planned expenditures for the economy of timbuktu are shown in the following table:

Total Output (Real GDP in Billion dollars)	Planned Aggregate Expenditures (Two-sector Economy) (in billions)
5,000	5,250
5,500	5,500
6,000	5,750
6,500	6,000
7,000	6,250

a. If the economy's full employment rate of output is 6.0 trillion, what will happen to the unemployment rate assuming that it will persist into future?

b. What would happen to the equilibrium level of output/income if there will be an autonomous increase in investment of 250 billion?

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