If the consumption function is C-800+0.6(Y-T), output, Y.= $2,100 and net taxes, T.-$100, then consumption=S For the data in the following table, the consumption function is C-800+0.6(Y-7) Fill in the columns in the table and identify the equilibrium output. The equilibrium output is s Output $2,100 2,600 3,100 3,000 4,100 4,600 5,100 Net Taxes $100 100 100 100 100 100 100 Disposable Consumption Income Spending $ Saving (Round your response to the nearest whole number) 300 300 300 300 300 Planned Investment Government Spending $300 300 Planned Aggregate Purchases Expenditure $400 400 400 400 400 400 400 Unplanned Inventory Change

If the consumption function is C-800+0.6(Y-T), output, Y.= $2,100 and net taxes, T.-$100, then consumption=S For the data in the following table, the consumption function is C-800+0.6(Y-7) Fill in the columns in the table and identify the equilibrium output. The equilibrium output is s Output $2,100 2,600 3,100 3,000 4,100 4,600 5,100 Net Taxes $100 100 100 100 100 100 100 Disposable Consumption Income Spending $ Saving (Round your response to the nearest whole number) 300 300 300 300 300 Planned Investment Government Spending $300 300 Planned Aggregate Purchases Expenditure $400 400 400 400 400 400 400 Unplanned Inventory Change

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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7. Question 3. The consumption function Consider the hypothetical country of Kejimkujik. Suppose that national income in Kejimkujik is $12 billion, households pay $4 billion in taxes, household consumption is equal to $6 billion, and the marginal propensity to consume (MPC) is 0.625. On the following graph, use the blue line (circle symbol) to plot the economy's consumption function. CONSUMPTION (Billions of dollars) 20 18 16 14 12 10 8 OF 6 4 2 0 6 8 10 12 14 16 DISPOSABLE INCOME (Billions of dollars). 18 20 Consumption Function
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QUESTION 36 1 Q = 1- mpc + mpc •t (C, +1+ G + X„) 1 AQ = 1- mpc+ mpc · t (AC, + AI + AG + AX„) | = 100, G = 200, Ca = 100, Xn -100, mpc = 4/5, t (income tax rate) = 1/4 36. Given this model, what is the equilibrium level of income? 125 300 500 750 1,000
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Question 2 Refer to the information provided in Figure 23.9 below to answer the question(s) that follow. Aggregate expenditures ($ millions) 225 200 175 150 45° AE 100 200 300 Aggregate output ($ millions) Figure 23.9 a) Refer to Figure 23.9. Write the equation for the aggregate expenditure function (AE). Show your work. b) Refer to Figure 23.9. What is the equilibrium level of output in this economy? State the equilibrium condition used to determine this. c) Explain the forces that maintain/drive the economy to this equilibrium by considering what will happen at the following two levels of output, $300 million and $100 million. You will need to discuss changes in investment through unplanned inventories and the response of output. d) Refer to Figure 23.9. How will equilibrium aggregate expenditure and equilibrium aggregate output change as a result of a decrease in investment by $20 million? e)The interest rate is an exogenous factor that effects the level of investment in an economy.…
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a) Given the following values of consumption, investment, and government purchases (all in (in millions of $) at three point of Real GDP, calculate (in millions of $) and plot the Total Expenditures curve. Real GDP Consumption Investment Government Purchases Total Expenditure Q1 600 50 200 Q2 750 80 400 Q3 1000 100 600 b) On the same diagram, draw the TP curve. Explain the reason behind the shape and position of the TP curve. c) Given, optimal inventory is $500 million worth of goods, TE = $2000 million worth of goods and TP = $2300 million worth of goods, how will the economy adjust to achieve equilibrium? d) Assume the economy is in recessionary gap. On the same diagram you in part a), show this case. If the government intervenes using…
Fill in the missing blanks in the following table. Assume for simplicity that taxes are zero. Also assume that the values represent billions of dollars. National Income and Real GDP (Y) $12,000 $13,000 $14,000 $15,000 $16,000 In the above example, the marginal propensity to consume is In the above example, the marginal propensity to save is Consumption (C) $9,600 $10,400 $11,200 $12,000 $12,800 Saving (S) $ $ (Enter your response rounded to two decimal places.) (Enter your response rounded to two decimal places.) GA $ $ $
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Suppose an economy is depicted by the expenditure function provided below: C + G + I + X = $200 + 0.80×Y + $350 + $225 + $125 All figures are in billions of dollars. Assume there are no taxes in this nation so disposable income Yd = Y. The economy reaches an equilibrium at $enter your response here billion. (Enter your answer as a whole number)