I have answered a through d. please answer the rest. Assume in Fantastic land, MPC = 0.75, and autonomous consumption = $6000. Planned investment = $2000, and planned government purchases = $5000. All Planned I and G are autonomous expenditures. Taxes ( T) is = $1000, and net exports = zero. a. Write out the consumption function =6000+0.75y b. What is induced consumption in this model?=0.75y c.Write out the planned expenditure function (show your work)=12250+0.75y d. Calculate current equilibrium real current GDP (income) (show your work)= 49000 e. How much is the expenditure multiplier? f.How much is the net tax multiplier g.At the current level of equilibrium, the economy is experiencing a recessionary gap of $4000. How much is the full employment GDP? h. How much will fantastic land change lump-sum tax to close the recessionary gap? i.Write out the new planned expenditure function to reflect the change in lump-sum taxes to close the recessionary gap of $4000. j.Graph the planned expenditure function. Show current equilibrium point, full employment Y, shift in planned expenditure for a change in lump-sum taxes. Label the autonomous points.
I have answered a through d. please answer the rest.
Assume in Fantastic land, MPC = 0.75, and autonomous consumption = $6000. Planned investment = $2000, and planned government purchases = $5000. All Planned I and G are autonomous expenditures. Taxes ( T) is = $1000, and net exports = zero.
a. Write out the consumption function =6000+0.75y
b. What is induced consumption in this model?=0.75y
c.Write out the planned expenditure function (show your work)=12250+0.75y
d. Calculate current equilibrium real current
e. How much is the expenditure multiplier?
f.How much is the net tax multiplier
g.At the current level of equilibrium, the economy is experiencing a recessionary gap of $4000. How much is the full employment GDP?
h. How much will fantastic land change lump-sum tax to close the recessionary gap?
i.Write out the new planned expenditure function to reflect the change in lump-sum taxes to close the recessionary gap of $4000.
j.Graph the planned expenditure function. Show current equilibrium point, full employment Y, shift in planned expenditure for a change in lump-sum taxes. Label the autonomous points.
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