Deriving and exploring the total expenditures curve The following graph shows total production (TP) and the level of Natural Real GDP (NRGDP) for a hypothetical economy. When Real GDP is $350 billion, consumption is $300 billion, government purchases are $25 billion, and investment is $50 billion. When Real GDP is $400 billion, consumption is $325 billion, government purchases are $25 billion, and investment is $50 billion. Use the blue line (circle symbol) to plot the economy's total expenditure function within a simplified Keynesian framework. (?) The economy is in equilibrium when Real GDP is? [$425 billion, $400 billion, $350 billion, or $375 billion] At this point, the economy is also in? [Says Paradox, a recessionary gap, or an inflationary gap] which of the following did Keynes argue would be needed to move the economy to the equilibrium at Natural Real GPD? Check all that apply. - An increase in investment A decrease in government purchases - A decrease in consumption - An increase in government purchases TOTAL EXPENDITURE (Billions of dollars) 500 450 425 400 375 350 325 TP 300 300 325 350 375 400 425 NRGDP 450 475 500 REAL GDP (Billions of dollars) TE

Deriving and exploring the total expenditures curve The following graph shows total production (TP) and the level of Natural Real GDP (NRGDP) for a hypothetical economy. When Real GDP is $350 billion, consumption is $300 billion, government purchases are $25 billion, and investment is $50 billion. When Real GDP is $400 billion, consumption is $325 billion, government purchases are $25 billion, and investment is $50 billion. Use the blue line (circle symbol) to plot the economy's total expenditure function within a simplified Keynesian framework. (?) The economy is in equilibrium when Real GDP is? [$425 billion, $400 billion, $350 billion, or $375 billion] At this point, the economy is also in? [Says Paradox, a recessionary gap, or an inflationary gap] which of the following did Keynes argue would be needed to move the economy to the equilibrium at Natural Real GPD? Check all that apply. - An increase in investment A decrease in government purchases - A decrease in consumption - An increase in government purchases TOTAL EXPENDITURE (Billions of dollars) 500 450 425 400 375 350 325 TP 300 300 325 350 375 400 425 NRGDP 450 475 500 REAL GDP (Billions of dollars) TE

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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From the information above, calculate the level of consumption and saving that occurs at the equilibrium level of income.
This question has four parts, here is the fourth and final part. 1.4. Create a graph for the aggregate expenditures (AE) model in Excel using the data from Table 1: A Private Closed Economy. (table 1 is in the attachment) tips: 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 is: Y = C + I , and AE (aggregate expenditure) = C + I
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The table given below shows the values of different components of aggregate expenditure of an economy. At the equilibrium level of gross domestic product (GDP), saving equals Table 9.2 (Trillions of Dollars) Real Net Disposable Consumption Saving Planned Government Net Planned GDP Таxes Income (C) (S) Investment Purchases Exports Aggregate (Y) (NT) (Y – NT) (I) (G) (X – M) Expenditures C+I+G+(X-M) 5.0 1.0 4.0 3.9 0.1 1.0 1.0 -0.7 5.2 5.5 1.0 4.5 4.3 0.2 1.0 1.0 -0.7 5.6 6.0 1.0 5.0 4.7 0.3 1.0 1.0 -0.7 6.0 6.5 1.0 5.5 5.1 0.4 1.0 1.0 -0.7 6.4 7.0 1.0 6.0 5.5 0.5 1.0 1.0 -0.7 6.8 O a. $0.2 trillion O b. $0.1 trillion O c. $0.3 trillion O d. $0.4 trillion O e. $0.5 trillion
21 Homework Unanswered Due Mar 17th, 11:59 PM → Important Suppose the initial change in spending is $12 billion. The indirect effects of that change cause a change in total spending of $24 billion. What is the mpc? Type your numeric answer and submit