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

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.A: The Simple Algebra Of Income Determination And The Multiplier

Problem 4TY

See similar textbooks

Similar questions

Assume the following information for an imaginary, closed economy. GDP = $120,000; consumption = $70,000; private saving = $9,00%3; national saving = $12,000. (Please write the calculation details) %3D %3D %3D (1) For this economy, what does investment amount to (2) For this economy, what do government purchases amount to? (3) For this economy, what do taxes amount to? (4) Is this economy's government budget surplus or budget defcit? How much it is?
1. Country X has following data: C = 20 + 0.8Y4, I = 30, G = 40, Tx = 20, T, = 15, X = 60, M = 20 + 0.04Y, incoming year growth target is 600, All figures is billion. Please calculate: a. National income equilibrium! b. Consumption and saving equilibrium! c. Government income from tax! d. How much change in government consumption if they want to achieve growth target?
Assume an open economy in which GDP is $20 trillion. If consumption is $14 trillion, government spending is $3 trillion, taxes are $2 trillion, government transfers are $0, exports are $2 trillion, and imports are $3 trillion, what is investment spending? a) $2 trillion b) $1 trillion c) $4 trillion d) $3 trillion
Assume that total expenditure E comprises the sum of government consumption, G, household consumption, C, and investment, I. Assume a closed macroeconomic system, so that income equals expenditure Y=E. If we define household saving, SH, as SH=Y-T-C, where the cunsumption function is a fixed proportion of disposable income, C=c(Y-T), which of the following will be true? a. Higher government spending alongside unchanged taxation will lead to higher investment and higher household saving b. Higher government spending alongside unchanged taxation will have no effect on household saving or investment c. Higher government spending alongside unchanged taxation will lead to higher household saving d. Higher government spending alongside unchanged taxation will lead to lower household saving
A country’s GDP is defined by the following equation: GDP = Consumer Spending + Investmentspending. The economy of this country is closed and there’s no government. Investment spendingis defined by the following equation: Investment Spending = Investment (planned) + Investment(unplanned). Investment (planned) is fixed at 350. Consumer spending is defined by thefollowing equation: Consumer spending = 200 + 0.55 (GDP). And for this country, PlannedExpenditure = Consumer Spending + Investment Planned. Based on this information, attempt thefollowing questions:a. “Investment (unplanned) will be negative if GDP is 900” – showing work, test theauthenticity of this statement. b. How do you think GDP (and production) will change if the income of this country is 1500?Explain by deriving Investment (unplanned) for an income of 1500. c. Derive the GDP for which Planned Expenditure = GDP. d. Supposed Investment (planned) was increased to 450. How will income-expenditureequilibrium change. e. Relate…
Suppose that every additional 3 percentage points in the investment rate boosts GDP growth by 1 percentage point. Assume also that all investment must be financed with consumer saving. Investment rate investment GDP. The economy is now characterized by Consumption: Saving (Investment): GDP: $7 trillion $ 2 trillion $9 trillion Instructions: Enter your responses as a whole number. If the goal is to raise the growth rate by 2 percentage points, a. by how much must investment increase? $ billion b. by how much must consumption decline? billion
In an economy, consumers spend 800 million regardless of their level of disposable income. In addition, they spend 75% of their yearly disposable income. * Investment is fixed at 250 million, Gvt expenditures are 120 million, net taxes are 100 million, exports are 170 million. Imports are 15% of the level of disposable income. Q, what is this economies equilibrium level of output Q how much would net export be when this economy is at equilibrium output
To find aggregate planned expenditures, which of the following must be added to consumption expenditure? i. net exports ii. investment iii. government expenditure on goods and services i only ii only iii only i and ii i, ii, and iii In the figure above, the shift in the supply of loanable funds curve from SLF1 to SLF3 could be the result of an increase in the real interest rate. an increase in expected future income. a decrease in expected future income. an increase in expected rate of profit. a decrease in the real interest rate.
Only typed answer Given the following for the economy of a country: Consumption function: C=90+0.75Yd. Investment function: I=75. Government spending: G=100. Net export: NX=50. Net taxes: T=50. Disposable income: YdY-T. Equilibrium: Y=C+I+G+NX. a. Solve for equilibrium income. Show your work below. b. If autonomous investment decreases by 60, what is the new level of income? Show your answer on the same graph. Show your work below. c. What is the value of the spending multiplier? Show your work below.
Suppose GDP is $12 trillion, taxes are $3.6 trillion, private saving is $1.5 trillion, and public saving is $0.8 trillion. Assuming the economy is closed, complete the following table by calculating consumption, government purchases, national saving, and investment. Amount Component (Trillions of dollars) Consumption Government Purchases National Saving Investment Grade It Now Save & Continue Continue without saving
Assume that a nation's marginal propensity to consume (MPC) is 0.75. A highiy productive, cost-cutting technology is developed for the production of commercial airplanes. The total industry expenditure in this nation is $100 million for the immediate acquisition and adoption of this technology. (a) For this nation, identify and explain how much this spending on new technology will change each of the following in the first round: i. Income (GDP) L. Saving i. Consumption (b) Assuming a closed economy and no leakages, identify and explain how much this spending on new technology will change each of the following at the end of the final round: i. Income (GDP) ii. Saving li. Consumption
please kindly assist with the following Which of the following represent injections into the circular flow of income and spending?(a) Exports and investment;(b) Government spending and imports;(c) Government spending and saving; (d) Imports and saving. In the circular-flow diagram, the goods markets are where: (a) The households purchase goods from firms;(b) Firms purchase goods from government;(c) Firms purchase goods from households;(d) The government purchases goods from households. Money overcomes the problem of a double coincidence of wants inherent in the barter system through its function as a:(a) unit of account.(b) store of value.(c) medium of exchange.(d) standard of deferred payment. The ________ demand for money arises out of the need to hold money as a medium of exchange. This demand for money is a function of ________.(a) precautionary; interest rates (b) transactions; national income (c) speculative; interest…