In the table below, there are no taxes (so that that real GDP equals disposable income) and no imports or exports. If real GDP decreases from $6,000 to $5,000, the marginal propensity to consume is Real Consumption GDP expenditure (dollars) (dollars) 3,000 2,500 4,000 3,250 5,000 4,000 6,000 4,750 5,500 7,000 8,000 6,250 Investment (dollars) 500 500 500 500 500 Government expenditure (dollars) 500 500 500 500 500 500 500

In the table below, there are no taxes (so that that real GDP equals disposable income) and no imports or exports. If real GDP decreases from $6,000 to $5,000, the marginal propensity to consume is Real Consumption GDP expenditure (dollars) (dollars) 3,000 2,500 4,000 3,250 5,000 4,000 6,000 4,750 5,500 7,000 8,000 6,250 Investment (dollars) 500 500 500 500 500 Government expenditure (dollars) 500 500 500 500 500 500 500

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

None
The aggregate expenditures of the hypothetical country shown includes $2 billion in investment expenditures, $3 billion in government expenditures, and $1 billion in exports. At a real GDP of $18 billion, consumption expenditures less imports equal $12 billion and imports equal $2 billion. Use this information to graph the aggregate expenditures (AE) function. Assume autonomous consumption and autonomous imports are $0.
The consumption expenditure and output of the country is 500 billion and 100 billion respectively. Calculate the average propensity to consume.
Ab 26 Economics
Suppose that in an economy with no government, the aggregate expenditure function is: AE = 50+0.75Y with an investment level of 100. i) Determine the level of planned expenditure when income is 150.
Desired Aggregate Expenditure (AE) 1000 650 325 0 FIGURE 22-3 Actual National Income (Y) 45° C = 350 + (0.68)Y C = 325+ (0.65)Y C = 1000 + (0.80)Y AE I+G I Refer to Figure 22-3. Which of the following correctly describes the consumption function for this economy?
Question 1: In an economy C = 350 + 0.75 Y is the consumption function where C is consumption expenditure and Y is national income. Investment expenditure is 4,000. a) Calculate equilibrium level of income. b) Calculate consumption expenditure.
The table below provides income and consumption data in billions of dollars: Disposable Income Consumption Savings 100 80 --- 200 150 --- If the government increases spending by $5,000, then based on the data, GDP in this economy will increase by: A) $7,142.85 B) $22,000 C) $16,650 D) Cannot be answered
Consider the Savings-Investment model involving: The Savings function: S = S0+s1Y+s2r; and the Investment function: I = I0+ir; where: Y = GDP, r = interest rate; and equilibrium occurs when Savings equal Investment. (i) Solve for the equilibrium GDP Y* (ii) Using your Y*, find the Investment-Multiplier dY*/dI0
The graph below shows the consumption schedule for Zamunda. Research has yielded the following information about Zamunda: At the current interest rate, gross investment (1) is $500, government purchases (G) are $800, exports are $400, and imports are $200. Instructions: In part a, enter your answer as a whole number. In part c, round your answers to one decimal place. a. By supplementing the consumption schedule in the graph below to include the expenditures for gross investment (1), government purchases (G), and net exports (NX) stated above, what is the new value of the vertical intercept? b. In the graph below, create an aggregate expenditures schedule by including the expenditures for gross investment (I), government purchases (G), and net exports (NX), and indicate the new equilibrium level of real GDP for the complete aggregate expenditures schedule.
11:04 AM ECON 122 CAT ONE.docX Phoenix Files QUESTION ONE Is it desirable for a country to have a large gross domestic product? Explain (2 marks) QUESTION TWO You are given data on the following variables in an economy Government spending 300 Planned investment Net exports Autonomous taxes Income tax rate Marginal propensity to consume 0.5 a) Consumption (C) is 600 when income (Y) is equal to 1500. Solve for autonom ous consumption (2 ma rks) ii) 200 S 50 b) Solve for the equilibrium level of output in the following two scenarios: i) There is an income tax t=0.1, Edit 0.1 250 Q Search © | 46| 472 [ 66 c) In the economy with an income tax of 10%, what is the budget balance of the government? (2 marks) O X: × There is no income tax in the economy. Denote these two variables by Yw and YN respectively. (4 marks) d) Solve for the change in net exports that would bring the equilibrium output lev el in the economy with the income tax to the level of YN that you found in part b. specify both…
When the level of income is $1200 billion and $1100 billion is devoted to consumption what would be the average propensity to consume?