Follow-on from Question 14: Given I, = = 200 and G = 200, find the equilibrium level of GDP. Show your working. The equilibrium position for an economy is represented by the following equations: Y = C + I, + G %3D C = a + b(Y – T) T = tY Let a = 25, b = 0.8 and t = (0.3. %3D Determine the value of the multiplier for this economy. Show your working.
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Q: MPC = .75 What is the value of the multiplier?
A: MPC=0.75 MPS=1-0.75 =0.25
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A: Disposable income = Y - TA + TR Y= income TA = taxes TR= transfer payment
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A: MPC: It measures the proportion of extra income that is spent on consumption.
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A: Keynesian multiplier = 1/ MPS Marginal propensity to save = 1 - Marginal propensity to consume
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A: Marginal propensity to consume refers to the change in consumption with respect to change in income.
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Q: The multiplier effect demonstrates that:
A: Multiplier effect is one of the macroeconomic concept.
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- An economy is described by the following equations: Y = C + I, + G C = a + b(Y – T) T = tY %3D %3D Let a = 20,6 = 0.75, t = 0.25, I, = 100, G = 240 %3D (a) Determine the value of the multiplier for this economy, and find the equilibrium value of Y. (b) Find the values of C, T and G-T, given your answer to part (a). (c) Describe what would happen if the government tried to eliminate its budget deficit by undertaking a cut in G equal to the current value of G-T. HTML Editor B IUA A ▼ 回 深 D ¶ T 12pt Paragrap IIYou are an economic advisor to the government. Discuss your opinion . a) How COVID-19 pandemic will affect the consumption behavior as well as the investment done by the firms and household for the next two years? b) What are the actions or policies that the government can implement to face this situation? please answers with analysis and --graph (if possible)Study the scenario and complete the question(s) that follow(s): Silesia You are provided with the following information about an imaginary economy called Silesia. Use the information provided in the table to answer the questions below. Government expenditure 400 Exports 250 Autonomous imports 50 Autonomous consumption 150 Investment Expenditure 300 Full-employment output 2040 Marginal propensity to consume 0.75 Marginal propensity to import 0.15 Таx rate 0.25 5.1 Derive and calculate the consumption function for the data provided. Show all formulas and calculations used. 5.2 Calculate autonomous spending. Show all formulas and calculations used. 5.3 Calculate the multiplier. Show all formulas and calculations used. Round off your final answer to 1 decimal. 5.4 Calculate the equilibrium level of income, using the values calculated in 5.2 and 5.3 above. Show all formulas and calculations used. 5.5 Calculate the government surplus or deficit at the equilibrium level of income. Show all…
- Required information Skip to question The basis of the parameters for an economy shown in Table 6.5. (All figures are in $billion.) Table 6.5 G = 1200 I = 400 C = 100 + 0.6Y XN = 700 - 0.2Y Refer to Table 6.5 to answer this question. What is the value of the multiplier in this economy? Multiple Choice 1. 1.54. 1.67. 2. 5.Assume that the economy is now governed by a government and begins trading with other economies. The economy is described by the following set of equations. ?=1000+0.5⋅?d ID = 600 G=700 T=400 EX=0.1⋅Y IM=100+0.1⋅Y YD = Y - T Calculate the equilibrium level of output Y* a) 2857 b) 4000 c) 6274 d) 4400 Whats the government expenditure multiplier? Whats the tax multiplier? Whats the ba;anced budget multiplier?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
- A different economy can be modeled with these equations: C = 150 + b Yd, I = 260, G = 70, X = 280, M = 325, and T = 60. If the multiplier on Investment is 6.25, what is the value of b?Consider the following economy. What is the mpc in this economy? Planned Government Net Exports Aggregate Change in Real GDP (Y) Consumption (C) Investment (I') Purchases (G) (NX) Expenditures (AE) Inventories 10000 8200 800 11000 9000 600 12000 9800 13000 14000 15000 800 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 0.50 b 0.75 C 0.80 d 0.90Assume an economy is represented by the following: C = 240 + 0.6Yd I = 400 G = 2000 T = 2000 a. Calculate the equilibrium level of output. (3 marks) b. Calculate the levels of consumption and saving that occur when the economy is in equilibrium.
- Assume an economy can be modeled with these equations: C = 210 + b Yd, I = 200, G = 103 - 0.054 Y, X = 280 M = 305 and T = -40 + 0.29Y. What is the value of b when the multiplier on Investment is 1.867? the answer is 0.733. What happens in the economy if total production (TP) is greater than total expenditures (TE)? 4. What is the relationship between a change in Real GDP (assuming a change in autonomous spending) and (the size of) the MPC.1. Consider a model of a goods market in a closed economy that is characterized by the followingequations:Consumption : C = 160 + 0.6(Y −T )Investment : I = 150Taxes : T = 100Government spending : G = 110EQ Output : Y = 1/(1 −c1)[c0 + I + G −c1T](a) Solve for the output in the economy.(b) Compute the sum of private and public saving.(c) Considering your answer to part b and the information given above, is this economy in equilib-rium? Explain.