Consider a closed economy model where Y=C+I+G, consumption is given by the function C=90+0.8(Y−T), investment is I=90, government purchases are G=60, and the government is running a budget deficit of 10. Which of the following is false? Group of answer choices Equilibrium disposable income is 990. Equilibrium GDP is 1000. Autonomous spending is 200. The multiplier is 5

Q: Consider an economy with an autonomous consumption of $4 million, a marginal propensity to consume…

A: According to neoclassical economists, the ultimate goal of economic activity is consumption, so, per…

Q: Consider an open economy described by the following equations: C = 400 + 0.90 (Y – T)…

A: An open economy implies that the economy exchanges goods and services with other countries.

Q: use the following equation. C = 50 + 0.6(Y – T) 9) What is autonomous consumption in this economy?…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Consider an economy described by the following equations:   C = 300 + 0.90 (Y – T)…

A: Government spending multiplier = 1 / 1 - MPC Government spending multiplier = - MPC / 1 - MPC

Q: Suppose the MPC is 0.8. The government wants to decrease Total Spending by $600. How should it…

A: MPC=0.8 Total Spending=$600 Multilplier= Change in Y/Change in G=1/1-MPC 600/Change in G=1/1-MPC

Q: Suppose that autonomous consumption is 1,000, government purchases are 2,000, planned investment…

A: GDP refers to the sum of consumption, investment, government spending and net exports in an open…

Q: Assume the economy's marginal propensity to consume is 0.8. Suppose that businesses decrease…

A: The multiplier (m) helps in knowing  the effect of a change in autonomous spending on the income…

Q: The consumption function is given by: C = 200+0.75 (Y-T). The investment  function  is I = 200-25r.…

A: IS curve refers to the investment savings curve.

Q: n a closed economy such that: C = 100 + 0.8 (Y – T)             Md = 0.25 Y - 50 R I = 700 - 50 R…

A: The basis of the IS-LM model is an analysis of the money market and an analysis of the goods market,…

Q: a) Draw a consumption function and label the axes. b) Suppose that your friend has a consumption…

A: diagrammatically, a consumption function looks like the following,

Q: You are given the data concerning Freedonia, a legendary country i. C = 200 + 0.8Y ii. I =…

A: Investment: In a two-area economy, one piece of the aggregate expenditure is utilizing and the…

Q: You are given the following data concerning Freedonia, a legendary country: • Consumption function:…

A: The MPC (Marginal Propensity to Consume) is the change in consumption for a change in income. In…

Q: Assume the economy is initially in goods market equilibrium with all variables at their expected…

A: The main idea behind the multiplier effect is that an autonomous change in any AD component (C, I,…

Q: Suppose the following list of events describes all of the economic activity resulting from an…

A: Economic activity encompasses the entirety of exchanges concerning the creation, dissemination, and…

Q: Consider a closed economy model where Y=C+I+G, consumption is given by the function C = 90 +0.8(Y –…

A: The consumption function depicts the functional relationship among the total consumption and gross…

Q: onsider a small economy that is closed to trade, so its net exports are equal to zero. Suppose that…

A: The income expenditure model presumes that level of income is determined by the expenditure level. A…

Q: Assume that Consumption is C = c(Y-T); Taxes T=tY; Investment / = -bi; and Government expenditure…

A: Tax rate refers to the percentage of an individual's or a corporation's taxable income that must be…