If the consumption function is C = 100 + 0.75YD,I = 200, government spending is 200, and net exportsare zero, what will be the equilibrium level of output?What will happen to aggregate output if governmentspending rises by 100?

Q: An economy is in equilibrium. Find Marginal Propensity to Consume from the following: National…

A: The provided information are: National income (Y) = 2000 Autonomous consumption (a) = 400 Investment…

Q: Suppose that the level of GDP increased by $300 billion in a private closed economy where the…

A: Answer: Given, Change in GDP ∆GDP=$300MPC (marginal propensity to consume)=0.9Change in aggregate…

Q: In the table below, there are no taxes (so that that real GDP equals disposable income) and no…

A: Marginal propensity to consume(MPC) can be understood as the change in consumption expenditure with…

Q: The following table shows consumption (C), investment spending (I), and government purchases (G),…

A: Assume that, the income tax rate is 25%.  Base consumption is $100 (i.e., the consumption at zero…

Q: Consider the hypothetical country of Pelee. Suppose that national income in Pelee is $30 billion,…

A: In the given question we are given with,national income(Y)= $30 billiontax(t)= $10 billion,…

Q: If the marginal propensity to consume is 0.9, every $10 billion increase in taxes will cause a…

A: Marginal propensity to consume is change in consumption with respect to change in income.

Q: If aggregate demand is increased by 4500 and MPC is 0.75, what is the increase in Y?

A: Aggregate demand (AD): - It is the total demand for goods and services in an economy at a particular…

Q: How can a tax cut increase investment, and what is the impact on the economy?

A: A tax is a compulsory financial charge or levy imposed by a government on individuals, businesses,…

Q: Given the necessary increase in GDP of $360 and the MPC of 0.70, how much should we reduce taxes to…

A: The multiplier value depends on the marginal propensity consume. The higher the value of MPC ,…

Q: Suppose a closed economy with no government spending which in equilibrium is producing an output and…

A: Remember the tax multiplier is less than the government spending multiplier. And we know that the…

Q: Referring to this table, calculate the marginal propensity to consume. Type your response Output…

A: Marginal propensity to consume is a measure of change in consumption because of change in income or…

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: Assume taxes are zero and an economy has a consumption function of C = 0.68 (Yd) + $237.99.  What is…

A: The marginal propensity to consume (MPC) index measures the proportion of income that is spent on…

Q: Suppose MPC equals 0.9, government taxes 30% of all incomes, and the marginal propensity to import…

A: here we calculate the change in G, by using the relevant given information , so the calculation as…

Q: Suppose a closed economy with no government spending which in equilibrium is producing an output and…

A: Given information, Actual output generated: 2250 Marginal propensity to consume: 0.75 Potential…

Q: Assume taxes are zero and an economy has a consumption function of C = 0.72 (Yd) + $210.49.  What is…

A: In this case, we have to discuss the marginal propensity to save. Marginal propensity to save is…

Q: The table below shows data for three fictitious countries. a. Compute the current MPC for each…

A: MPC is the ratio of change in consumption to change in income. It shows how much of the income is…

Q: Suppose the government increases expenditures by $100 billion and the marginal propensity to consume…

A: The Marginal Propensity to Consume is a measure in economics that represents the proportion of an…

Q: True or False. If spending exceeds output, real GDP will decline as firms cut back on production.

A: Since you have posted multiple questions, we will provide the solution only to the first question as…

Q: y'-t y-t C If taxes today (t) are lowered, and taxes tomorrow (t') are increased, what happens to…

A: In economics, a consumption schedule may also refer to a table or graph that shows the relationship…