I think I only need help on d and e In the country of Arcadia, the minimum amount of consumption spending that will occur in a given year is $50—that is, no matter what level of income households have, the aggregate amount of consumption spending in the economy will be at least $50. In addition, for every extra dollar of national income, consumption spending will increase by $0.75. (Note: For the entirety of this problem, assume that Taxes = transfers = 0, and the aggregate price level in Arcadia is fixed.)a. What is the marginal propensity to consume in Arcadia? - The marginal propensity to consume in Arcadia is 0.75.b. Write out the consumption function for the Arcadian economy. - C = 50 + 0.75YIn 2019 in Arcadia, planned investment expenditure was $150, there was no government spending or taxation or government transfers and no exports or imports.c. Write out the planned Aggregate Expenditure function for Arcadia. - AE = 200 + 0.75Yd. If real GDP (i.e., value of all production in the Arcadian economy) in 2019 were $600, what would be the level of planned Aggregate Expenditure? Would production be exactly equal to expenditure, or would suppliers have to reduce or increase inventories? If you’ve answered that suppliers would have to reduce or increase inventories, specify the amount of the change and be sure to indicate whether it is an increase or a decrease.e. What was the income-expenditure equilibrium level of real GDP in Arcadia in 2019? Support your answer by filling in all of the blank cells in the table below. (Note: you need to provide a numerical answer for the income-expenditure equilibrium level of GDP in Arcadia in 2019 AND fill in the table below.)| Real GDP | Disposable Income (Yd) | Consumption (C) | Planned Investment (Ip) | Planned Aggregate Expenditure (AEp) | Unplanned Investment (Iu) ||----------|-------------------------|-----------------|-------------------------|------------------------------------|--------------------------|| 500 | | | | | || 600 | | | | | || 700 | | | | | || 800 | | | | | || 900 | | |

Gross Domestic Product(GDP) refers-to the market value(mv) of all final goods(g) and services(s)…

C= 50 + 0.75Y In 2019 in Arcadia, planned investment expenditure was $150, there was no government spending or taxation or government transfers and no exports or imports. Write out the planned Aggregate Expenditure function for Arcadia. AE= 200 + 0.75 d. If real GDP (i.e. value of all production in the Arcadian economy) in 2019 were $600, what would be the level of planned Aggregate Expenditure? Would production be exactly equal to expenditure, or would suppliers have to reduce or increase inventories? If you've answered that suppliers would have to reduce or increase inventories, specify the amount of the change and be sure to indicate whether it is an increase or a decrease. e. What was the income-expenditure equilibrium level of real GDP in Arcadia in 2019? Support your ansvrer by filling in all of the blank cells in the table below. (Note: you need to provide a numerical answer for the income-expenditure equilibrium level of GDP in Arcadia in 2019 AND fill in the table below) Planned Unplanned Aggregate Expenditure (AEp) Disposable Planned Investment Consumption (C) Income Investment Real GDP (YD) (Ip) (IL) 500 600 700 800 900 1,000

C= 50 + 0.75Y In 2019 in Arcadia, planned investment expenditure was $150, there was no government spending or taxation or government transfers and no exports or imports. Write out the planned Aggregate Expenditure function for Arcadia. AE= 200 + 0.75 d. If real GDP (i.e. value of all production in the Arcadian economy) in 2019 were $600, what would be the level of planned Aggregate Expenditure? Would production be exactly equal to expenditure, or would suppliers have to reduce or increase inventories? If you've answered that suppliers would have to reduce or increase inventories, specify the amount of the change and be sure to indicate whether it is an increase or a decrease. e. What was the income-expenditure equilibrium level of real GDP in Arcadia in 2019? Support your ansvrer by filling in all of the blank cells in the table below. (Note: you need to provide a numerical answer for the income-expenditure equilibrium level of GDP in Arcadia in 2019 AND fill in the table below) Planned Unplanned Aggregate Expenditure (AEp) Disposable Planned Investment Consumption (C) Income Investment Real GDP (YD) (Ip) (IL) 500 600 700 800 900 1,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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