In a closed economy, consumers spend $400 regardless of the level of income, and the marginal propensity to consume (MPC) is 0.80. Investment is equal to $250. The government spends $300 and collects $200 in taxes. The equilibrium level of GDP in this economy is $ (enter your response rounded to the nearest dollar).
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![In a closed economy, consumers spend $400 regardless of the level of income, and the marginal propensity to consume (MPC) is 0.80. Investment is equal to $250. The
government spends $300 and collects $200 in taxes.
The equilibrium level of GDP in this economy is S
(enter your response rounded to the nearest dollar).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F55c7cf69-2938-407d-97e8-9e6e738dad9c%2F1af7a71b-3305-4291-908e-4f0ab0bdd231%2Fxogwbmm_processed.jpeg&w=3840&q=75)
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- In a closed economy, consumers spend $300 regardless of the level of income, and the marginal propensity to consume (MPC) is 0.75. Investment is equal to $200. The government spends $400 and collects $50 in taxes. The equilibrium level of GDP in this economy is $Suppose that autonomous consumption (a) is 200, private investment spending (I) is 340, government spending (G) is 300, Net taxes (T) are 300 and marginal propensity to consume (b) is 80 %, and marginal tax rate (t) is 25 %. By using the above information: a) Find the equilibrium value of national income (you can take the approximate value if necessary b) Find out the effects of an increase in government expenditure by100 c) Just find the new national income equilibrium level when the marginal tax rate is increased to 30 % and the marginal propensity to consume is increasing to 0.9. (you can give the numerical value approximately )Consider the following table showing national income in billions of dollars. Assume that the marginal propensity to import is 20% and the level of exports is $60 billion. Calculate the level of net exports for each level of actual income and fill in the table below. (Round your responses to the nearest whole number.) Actual National Income (Y) (Billions of $) 200 400 600 800 1000 Net Exports (X-IM) (Billions of $) Now assume that the marginal propensity to import increases to 25%. Calculate the new level of net exports for each level of actual income and fill in the table below. (Round your responses to the nearest whole number.) Actual National Income (Y) (Billions of $) 200 Net Exports (X-IM) (Billions of $) 400 600 800 1000 When we compare these two tables, we can see that for a given level of exports, the higher the marginal propensity to import, the the level of net exports will be at each level of income.
- A $300 million decrease in investment spending will increase real GDP by more than $300 million. Is this a true statement? What is the relationship between investment spending and the GDP? I think that investment spending goes directly into the economy so I believe the answer to be true. But I am not sure.In a closed economy with government, the marginal propensity to consume is 0.5 and the tax rate is 0.2 Calculate the multiplier. Answer the question by providing the appropriate number including at least 2 decimal points in the box below (e.g., 1.23) Do not enter a comma, space, letters, words or symbols (such as %). Failure to follow these instructions will result in your answer being marked as incorrect. ( Previous page Next page > PHILIPSICETASK 4 Question 1 Fill in the missing words: Suppose South Africans start to save more. This will result in a (4.1) shift of the (4.2) curve. The equilibrium level of output will (4.3) and the equilibrium price level will (4.4). The level of unemployment in the economy has (4.5). (4.6) fiscal policy can be implemented by the South African government to reduce unemployment. This involves (4.7) government expenditure and (4.8) tax. The effect of this fiscal policy is that the (4.9) curve will shift to the (4.10).
- Need help with this, please show me where to plot the two points on the graph as well. Thanks!The desired aggregate expenditure function of an economy is illustrated in the graph to the right. The dashed line, Y*, shows the potential level of national income in this economy. The marginal propensity to spend is 0.75. Use the point drawing tool to plot and label the equilibrium level of income. Carefully follow the instructions above, and only draw the required object. Desired Aggregate Expenditure ($ billions) 3,750- 3,000- 2,250- 1,500+ 750 500 0- Aggregate Expenditure Function 0 45 line AE Y = 3,000 4,000 1,000 2,000 3,000 Actual National Income ($ billions)From the information below calculate aggregate demand; Consumption (C) = $200 + 0.6Y Investment (I) = $300 Government (G) = $100 Net Export (NX) = $50 What is the value of the marginal propensity to save?
- suppose the government wishes to illuminate recessionary of a gdp of 100 billion in the MPC is .075. How much must the government increase in spending? Instead of increasing government spending by the amount you calculated what would be the effect of the government decreasing taxes by this amount explain?Suppose the interest on the debt was $700 billion. If interest is paid domestically, 90% will be spent domestically (the remainder is spent on foreign goods). If interest is paid to the foreign sector, only 10% is spent here (the remainder is spent in foreign countries). Every dollar collected in axes to pay the interest cause domestic spending to fall 90 cents. The spending multiplier is 2. d) What is the net impact on GDP if all interest is paid domestically?Consider the hypothetical country of Kejimkujik. Suppose that national income in Kejimkujik is $300 billion, households pay $100 billion in taxes, household consumption is equal to $160 billion, and the marginal propensity to consume (MPC) is 0.6. On the following graph, use the blue line (circle symbol) to plot the economy's consumption function. Consumption Function050100150200250300350400450500500450400350300250200150100500CONSUMPTION (Billions of dollars)DISPOSABLE INCOME (Billions of dollars) Suppose now that Kejimkujik’s national income increases to $330 billion. Assuming the amount paid in taxes is fixed at $100 billion and that MPC = 0.6, what is the new amount of household consumption? $148 billion $219.4 billion $220.6 billion $178 billion
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