Answered: If Mexican exports to Canada decline by…

If Mexican exports to Canada decline by $14 billion, by how much will Mexico's aggregate spending drop if its MPC is 0.80?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter22: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 9P

See similar textbooks

Related questions

Q: Will a direct increase in the price of U.S. goods relative to foreign goods lead to a change in the…

A: Direct increase in the price of U.S goods relative to foreign goods will lead to fall in consumption…

Q: Using the ZZ/Y and NX graphs, illustrate graphically and explain what effect a decrease in consumer…

A: Imports lead to a surge of assets from the country since import exchanges include installments to…

Q: Suppose you own a toy store in the United States, where there is high demand for the PlayNation 3, a…

A: $15000 is spent on inventory of the gaming system which is manufactured by Zony, a japanese company,…

Q: If Korean exports to the U.S. decline by $15 billion, by how much will total Korean spending drop if…

A: How much Korean spending will fall, if the exports to the US declined by $15 Billion. Given, Change…

Q: Assume a country would like to increase investment by limiting consumption. What would be the point…

A: If a country increases investment by limiting consumption then the aggregate demand will increase.…

Q: "In an economy with a high dependency on imported oil, what is the likely macroeconomic impact of a…

A: When the value of imports and exports in an economy is equal, the condition is known as the trade…

Q: Using the ZZ/Y and NX graphs, illustrate graphically and explain what effect an increase in taxes…

A: Aggregate demand (AD) in macroeconomics refers to the overall demand for finished goods and services…

Q: Use the AE model to explain and show the impact of an autonomous fall in the value of goods exported…

A: The change in the export and import would affect the net export of country, so the aggregate demand…

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

Q: Suppose that εD = 0.70 and ε_D^F = 0.50 for a given country: Suppose that the foreign currency price…

A: The quantity of exports that are demanded in response to a change in the price of exports is…

Q: Consider an economy (with no international trade) in which the price level is constant where C = 500…

A: The equilibrium level of GDP is that point where the AE (aggregate expenditure) which is a straight…

Q: The trade feedback effect shows that O A 50 million dollar increase in U.S. exports results in a 30…

A: Trade feedback is considered the process of analyzing the data from trading activities with their…

Q: Is our US Economy in Equilibrium? What recent events might cause you to indicate that it is or not?

A: Answer: Equilibrium in an economy refers to the situation where Aggregate demand is equal to the…

Q: Consider the economy of Canada. Its households spend 55% of increases in their income and saves 45…

A: The problem is to estimate the size of a tax cut necessary in the Canadian economy for the actual…

Q: Consider a small country that is closed to trade, so its net exports are equal to zero. The…

A: DISCLAIMER “Since you have asked multiple questions, we will solve the first three questions for…

Q: Consider the following model of an economy with no international trade, and in which the price level…

A: The consumption of the economy, the planned investment and the government expenditure along with the…

Q: Consider the following hypothetical data for the U.S. economy in 2020 (in trillions of dollars), and…

A: Gross domestic product (GDP) is the sum of the market value of all the final goods and services…

Q: If Canada increase its export of lithium, in such a way that national exports would increase, would…

A: When talking about imports-exports,it can be said that more exports will increase national output,…

Q: A firm has the following production function: y = f(x) where y is the output and x is the input. If…

A: ANS AP is the amount of output (o/p) per unit of labor. It is given by the following formula: AP =…

Q: Consider a small open economy and suppose the global interest rate (r*) is 8%, the investment amount…

A: Domestic Investment = I = 15M -0.5r Domestic Savings = S = 12M Now, in a close economy, I=S,…

Q: Prove the foreign investment multiplier is equal to 1 all over mpm + mps (1/mpm+mps)

A: Multiplier is an important part of modern economics, Keynes introduced the concept of investment…

Q: If the U.S. Dollar appreciates, foreigners will find American goods more expensive because they have…

A: Appreciation of domestic currency makes exports costlier and imports cheaper.

Q: Explain how the removal of online purchase taxes on ICT devices may effect a country's national…

A: Firms functioning in the digital eco-system are subject to a variety of taxes. To begin with, all…

Q: Opening the economy to trade tends to increase the multiplier because an increase in expenditure…

A: In economics multiplier refers to describe an economic factor that influences changes in many other…

Q: At an aggregate output level of $400 billion what is aggregate savings?

A: Consumers make use of their income for both saving and consumption purposes. The part which is spent…

Q: The following graph shows the aggregate demand (AD) curve in a hypothetical economy. At point A, the…

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…

Q: If the income in Mexico rises, all else the same, what will happen to the US exports to Mexico?…

A: The US exports to Mexico are the quantities of goods and services bought by Mexican residents from…

Q: In what way does the tourism multiplier affect the economy of the host country?

A: The act and practise of spending time away from home in search of entertainment, relaxation, and…

Q: Assuming there is no trade, if the Marginal Propensity to Save is 0.10 and the government increases…

A: Given Marginal Propensity to Save is 0.10 Government increases spending by $4 billion

Q: A reduction in the marginal propensity to import will cause A) the multiplier to increase and a…

A: A reduction in the marginal propensity to import will cause B) the multiplier to increase and a…

Question

Problem 10-08 (Algo)
If Mexican exports to Canada decline by $14 billion, by how much will Mexico's aggregate spending drop if its MPC is 0.80?
Instructions: Enter your response as a whole number.
billion

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

I tried using 1/(1-MPC) but it didn't work
Please no written by hand solutions Currently, the U.S. has a total consumption of $21,300,000, savings of $9,700,000, government spending of $8,800,000, and investment of $6,800,000. Calculate the size of this government's budget deficit assuming net exports = net imports. $ Provide your answer as a whole number. Typed numeric answer will be automatically saved.
E Question 7 B Currently, the U.S. has a total consumption of $10,000,000, savings of $4,000,000, tax revenues of $5,000,000, and government spending of $8,000,000. Assuming net exports are zero, solve for the total investment in the U.S. economy. S Provide your answer as a whole number. Typed numeric answer will be automatically saved
Problem 11-03 (algo) Answer the following questions: Instructions: Enter your answers rounded to the nearest whole number. a. By how much will GDP change if firms increase their investment by $11 billion and the MPC is 0.90? $ billion b. If the MPC is 0.75? $ billion
(03.08 LC) Which of the following would be an expansionary fiscl policy? Placing a limit on government expenditures Raising the income tax rate Increasing the corporate tax rate An increase in infrastructure spending OA decrease in defense spending
$75 150 225 Investment (5) Price Level Investment Demand 0, Real GOP $50 100 150 Investment (5) AD, (-$150) AD, (+$160) AD, (1950) Time left 1:55:03 Refer to the graphs above, in which the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the levels of investment spending associated with each curve. All figures are in billions. A shift in the aggregate demand curve from AD3 to AD2 can be achieved by Federal Reserve action to: Select one: O a. Increase the reserve ratio O b. Increase the discount rate Oc. Buy government securities in the open market Od. Sell government securities in the open market ?
Explain the key components of the below equation for open economy multipliers. How can we analyze the interaction between government expenditure and export in affecting national income/domestic output?
Only typed answer Suppose that an economy has the following functions for C, I, G, and NX: C= 51 + 0.89V I = 47 €=35 NX=12-0.10Y and the local tax rate is equal to 28%. What is the Simple Multiplier in this case?
refer to image
(d) Suppose government spending increases by some amount AGo to become Go+AGo. Show the change in Y and C as a response to this increase in spending.
If mps is .3 and marginal propensity to import is .1 and govt. Increases its expenditures by 10 billion then by how much will gdp rise??? (Ignoring foreign income repercussions).
Suppose the current price level in the economy is 150 and real GDP is$5t. Net exports fall by$1t. What must be true? A the price level is now more than 150 B SRAS shifts to the left (C) the price level is now less than 150 (D) SRAS shifts to the right