In the Keynesian AE model, if the autonomous components of consumption, investment, government spending, and net export spending total $100 billion, and the MPC is 0.75, what will unplanned changes in inventory be when output is $345 billion? O-$4 billion O $4 billion O $5 billion O-$5 billion When output is higher than the intersection of the Keynesian AE and the 45- degree line, which of the following can we expect to happen? Osavings to be negative and consumption to fall O inventories to rise and output to fall O inventories to fall and output to rise consumers to expect higher incomes and consumption to rise

In the Keynesian AE model, if the autonomous components of consumption, investment, government spending, and net export spending total $100 billion, and the MPC is 0.75, what will unplanned changes in inventory be when output is $345 billion? O-$4 billion O $4 billion O $5 billion O-$5 billion When output is higher than the intersection of the Keynesian AE and the 45- degree line, which of the following can we expect to happen? Osavings to be negative and consumption to fall O inventories to rise and output to fall O inventories to fall and output to rise consumers to expect higher incomes and consumption to rise

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

42
1. Aggregate expenditures and income The following table shows consumption (C), investment (1), government spending (G), and net exports (X-M) in a hypothetical economy for various levels of real GDP (Y). Assume that the price level remains unchanged at all levels of income. All figures are in billions of dollars. Compute aggregate expenditures for each income level and fill in the last column In the following table. Y с G 500 525 250 150 600 550 250 150 575 250 150 600 250 150 -200 900 625 250 150 -200 700 800 AL AGGREGATE EXPENDITURES (Billions of dollars) The following graph shows real GDP on the horizontal axis and aggregate expenditures (AE) on the vertical axis. The orange line (square symbols) represents a 45-degree (Y-AE) line. 1000 Use the blue points (circle symbol) to plot the aggregate expenditures line for this economy. Line segments will automatically connect the points. 900 300 I 700 X-M Aggregate Expenditures -200 725 -200 750 775 800 825 600 500 + -200 AE line *+…
If a $1000 increase in disposable income causes consumer spending to rise by $700, what is the marginal propensity to consume (MPC)? 0.60 0.50 0.85 O 0.70
Suppose an economy has no imports (MPI, m = 0). The MPC (c) is 0.75 and real GDP is $120 billion. Businesses increase investment by $4 billion. The multiplier is in real GDP from the increase in investment is and the change billion. O a. 5; $16 O b. 4; $25 O C. 5; $25 O d. 4; $16 e. 0.75; $3
Consider a basic goods market model where the propensity to consume is 60% of disposable income. If the government wants to increase output Y by 10%, public spending should beScegli un'alternativa: I do not answer increased by 2,5% of Y increased by 4% of Y increased by 10% of Y increased by 40% of Y
these multiple choice Questions from MACROECONOMICS Course.I need the final answer,please.
What will an increase in U.S. prices likely
2
Consider a Keynesian model of the economy with the following equations; C = 300 + 0.7Yd = 500 TR ァミ250 = 300 = 400 X 150 M = 0,2Y The equilibrium level of income is O €1,500 €2,720 €2,650 O €1,325
Consider a closed economy where investment is constant and the marginal propensity to consume is 0.8. In that economy, the government decides to increase its expenditures. Why is the associated Keynesian multiplier greater than 1? Select one: а. Because the production increase leads to a revenue increase which leads to a demand increase which leads to a consumption increase which leads to further increases in production, demand and consumption O b. Because the demand increase leads to a consumption increase which leads to a GDP increase which leads to a supply increase which leads to further increases in consumption, revenue and supply O c. Because the demand increase leads to a supply increase which leads to a revenue increase which leads to a consumption increase which leads to further increases in demand, supply and GDP O d. Because the production increase leads to a demand increase which leads to a supply increase which leads to a revenue increase which leads to further increases…
Imagine a 45°-line (Keynesian cross) diagram in which the upward-sloping aggregate expenditure curve intersects the 45°-line at point A. The economy is currently in macroeconomic equilibrium at output level Y.. Suppose that the price level increases. If the price level increases, the aggregate expenditures line will shift down The new equilibrium levels of GDP and expenditures will be O A. where the new AE line intersects the 45°-line. O B. unchanged. OC. anywhere on the new AE line ⒸD. where the new AE line interesects the original AE line.
According to ihe Bureau of Ecnnomic Analysis, during the recession of 2007–2009, household saving as a fraction of disposable personal income increased from a low of just over I percent in ihe first quarter of 2008 to 5 percent in the second quarter of 2009. All else equal, what impact would this change in saving have on the MPC, MPS, and multiplier? How would ihis change affect equilibrium output when planned investment changes?