**Understanding the Equilibrium Output in an Economic Model****Consumption Function and Equilibrium Calculation:**- The given consumption function is $ C = 800 + 0.6(Y - T) $.- Here, $ Y $ (output) is $3,100 and $ T $ (net taxes) is $100.- Using the formula, consumption is calculated as $2,600.**Table Explanation:**The table helps illustrate how different economic factors are related to the output and helps identify the equilibrium output:1. **Columns:** - **Output**: Levels of total production/income. - **Net Taxes**: Consistently set at $100 for all output levels. - **Disposable Income**: Calculated as Output minus Net Taxes. - **Consumption Spending**: Based on the consumption function, $ C = 800 + 0.6 \times $ (Disposable Income). - **Saving**: The difference between Disposable Income and Consumption Spending. - **Planned Investment Spending**: Fixed at $300 across different output levels. - **Government Purchases**: Fixed at $400 across different output levels. - **Planned Aggregate Expenditure**: Sum of Consumption Spending, Planned Investment Spending, and Government Purchases. - **Unplanned Inventory Change**: Difference between Output and Planned Aggregate Expenditure.2. **Equilibrium Output:** - The equilibrium output is determined when Unplanned Inventory Change is zero, signifying that planned aggregate expenditure equals the output level.The equilibrium output in this model is **$5,100**, indicated by the conditions where aggregate expenditure matches the output.

Equilibrium Output It alludes to the level of output where the Aggregate Demand is equivalent to the…

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

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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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