In the Keynesian cross model, assume that the consumption function is given by c= $220 + 0.7(Y – T) Planned investment is $50; government purchases and taxes are both SI00. c. If government purchases increase to $115, what is the new equilibrium income? What is the multiplier for government purchases? new Y=S multiplier:

In the Keynesian cross model, assume that the consumption function is given by c= $220 + 0.7(Y – T) Planned investment is $50; government purchases and taxes are both SI00. c. If government purchases increase to $115, what is the new equilibrium income? What is the multiplier for government purchases? new Y=S multiplier:

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter8: The Keynesian Model

Section: Chapter Questions

Problem 9SQP

See similar textbooks

Similar questions

In the Keynesian cross model, assume that the consumption function is given by C = $220 + 0.7(Y – T) Planned investment is $50; government purchases and taxes are both $100. d. What level of government purchases is needed to achieve an income of $1080? Assume taxes remain at $100. G=$ e. What level of taxes is needed to achieve an income of $1080? Assume government purchases remain at S100.
Q4. In the Keynesian cross model, assume that the consumption function is given byC=120+0.8(Y-T).Planned investment is 200; government purchases and taxes are both 400.a. Graph planned expenditure as a function of income.b. What is the equilibrium level of income?c. If government purchases increase to 420, what is the new equilibrium income? What is the multiplier for government purchases?d. What level of government purchases is needed to achieve an income of 2,400? (Taxes remain at 400.)e. What level of taxes is needed to achieve an income of 2,400? (Government purchases remain at 400.)
In a keynesian model it is assumed that the consumption function is given by C= 2000 + 0.75 (Y-T) and the planned investment is 1,000 government purchases and taxes are both of those and formulate and draw a graph of planned expenditure as a function of income What is the equilibrium level in the part above If the government purchases increased by 1250 what is the equilibrium income With the aid of a algebra prove that a balanced budget multiplier is always equals to 1
Which of the following statements about the Keynesian framework are accurate? a)Keynes posited a linear Consumption function C=Ca + mpcYd, where C is total desired consumption spending, Ca is consumption spending independent of income and Yd is disposable income and mpc is marginal propensity to consume b) In the C=Ca +mpcYd the Ca is the vertical axis intercept parameter, and mpc is the slope parameter. c) Keynes also posited that Investment spending was a function of expectations and the interest rate. d) In the Keynesian investment function the firm's estimated profitability of potential investment projects were determined by expectations of future sales and costs. e) Businesses would invest in those projects whose estimated profitability was greater than the market rate of interest. f) If the firms don't have the cash, they will borrow funds and earn the difference between the rate of return on the project and the lower market rate of interest. If they have more cash than needed…
Suppose that the marginal propensity to consume is 0.75. If the government decreases spending by Ksh 500 billion, what is the change in output? If the government decreases taxes by Ksh 500 billion, what is the change in (ii) output? If the government decreases transfer payments by ksh 500 billion, what is the change in output If the government decreases spending by ksh 500 billion and at the same time decreases taxes by ksh 500 billion, what is the change in output?
Suppose in a simple Keynesian economy, planned consumption function is given by C=250+0.65(Y-T). Planned investment, government purchases, taxes are $100 million, $100 million and $150 million respectively. What is MPC, MPS and autonomous consumption Derive the saving function. What is the equilibrium level of income? Y= AD=C+I+G If government purchases increase to $150 million, what is the new equilibrium level of income? What level of government purchases is needed to achieve an income of $2000 million? From question e) you get the newly government purchase. Now find out the multiplier value What is the amount of shift in AD curve? [Use the multiplier value from (5)]
Suppose in a simple Keynesian economy, planned consumption function is given by C=250+0.65(Y-T). Planned investment, government purchases, taxes are $100 million, $100 million and $150 million respectively. What is MPC, MPS and autonomous consumption Derive the saving function. What is the equilibrium level of income? Y= AD=C+I+G If government purchases increase to $150 million, what is the new equilibrium level of income? What level of government purchases is needed to achieve an income of $2000 million? From question (5) you get the newly government purchase. Now find out the multiplier value What is the amount of shift in AD curve? [Use the multiplier value from (5)] ** Need the answer of question 7 only **
If the Keynesian consumption function were C = 2,000 + 0.75YD , what would the value of the tax multiplier be, and how much would equilibrium $output/$income, Y, change if taxes were decreased by 200? Group of answer choices A) Tax multiplier = - 4 ; change in Y = + $160 B) Tax multiplier = - 5 ; change in Y = + $1,000. C) Tax multiplier = - 4 ; change in Y = + $800. D) Tax multiplier = - 5 ; change in Y = + $4,000. E) Tax multiplier = - 3 ; change in Y = + $600.
Saving function = S=- 500 + 0.25 Y, I = 400 - 1250 i Ms = 1200, Mt = 0.20 Y, Mp = 0.05 Y and Msp = 500 - 1300 i a) Calculate Y and i equilibrium b) If the government increase its expenditure by 100, what is the rate of national income growth and how many percent the effectiveness of this policy? c)Draw the graph completely.
If the consumption function is given by C=20+3/4 Y then the value of multiplier will be???
Consider a Keynesian model with consumption function C = 100 + c(Y – T), 0<c<1 where taxes T are given by T = 100 + tY, 0<t<1 with marginal tax rate t. An increase in G will increase equilibrium output by the multiplier: a. 1/(1 – c – c*t) b.1/(1 – c + c*t) c.1/(1 – c*t) d.1/(1 – c)
In a Keynesian cross diagram, if the government decreases the tax rate, or makes the leakage of taxation less a) the aggregate expenditure function will shift to the left, but its slope will not change b) the aggregate expenditure function will shift to the right, but its slope will not change c) the slope of the aggregate expenditure function will increase and increases the point at which it crosses the 45 degree line where Aggregate Output is equal to Aggregate Expenditures d) the slope of the aggregate expenditure function will decrease