Income is spent on Imports, and that 9% of disposable income is saved. Enter your responses below rounded to 2 decimal places. a. The marginal propensity to withdraw is b. From each new dollar of income $ is spent on domestic consumption Items. c. The value of the Canadian spending multiplier is

Income is spent on Imports, and that 9% of disposable income is saved. Enter your responses below rounded to 2 decimal places. a. The marginal propensity to withdraw is b. From each new dollar of income $ is spent on domestic consumption Items. c. The value of the Canadian spending multiplier is

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Please no written by hand and no emage Consider a small economy that is closed to trade, so its net exports are equal to zero. Suppose that the economy has the following consumption function, where C is consumption, Y is real GDP, I is investment, G is government purchases, and T stands for net taxes: C=40+0.5*(Y-T) Suppose G= 165 billion, I=50 billion, and T=10 billion. Given the consumption function and the fact that for a closed economy total expenditure can be calculated as Y=C+I+GY=C+I+G, the equilibrium output level is equal to _____ billion. Suppose the government purchases are increased by $100 billion. The new equilibrium level of output will be equal to _____ billion. Based on the effect of the change in government purchases on equilibrium output, you can tell that this economy's spending multiplier is equal to _____.
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An open market sale by the Bank of Canada will cause the value of the dollar to Select one: a. rise, while increasing net exports. b. rise, while reducing net exports. c. fall, while reducing net exports. d. fall, while increasing net exports.
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