la. Derive the expenditure multiplier for the economy. (Y = C + I+ G + (X – M) C = ca + cyd : where Ca = autonomous consumption, and Yd= (1-t)Y i.e. disposable income. %3D And t is the tax rate. M = Ma + mY : where Ma = autonomous consumption, and m=marginal propensity to import.
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- Assume that a nation's marginal propensity to consume (MPC) is 0.75. A highiy productive, cost-cutting technology is developed for the production of commercial airplanes. The total industry expenditure in this nation is $100 million for the immediate acquisition and adoption of this technology. (a) For this nation, identify and explain how much this spending on new technology will change each of the following in the first round: i. Income (GDP) L. Saving i. Consumption (b) Assuming a closed economy and no leakages, identify and explain how much this spending on new technology will change each of the following at the end of the final round: i. Income (GDP) ii. Saving li. ConsumptionIf mps is .3 and marginal propensity to import is .1 and govt. Increases its expenditures by 10 billion then by how much will gdp rise??? (Ignoring foreign income repercussions).52)Consider the following consumption function: C = 800 + 0.75 YD for the fictitious economy of Zapland. If the government increases taxes by $200 million, what is the change in GDP? Assume that there is no increase in the price level. Select one: a. -$800 million b. $600 million c. $800 million d. -$600 million e. -$300 million
- 23) If the marginal propensity to consume (MPC) is 0.8 and if government spending (G) rises by $50 while investment (1) falls by $20, by how much will equilibrium income rise? (Jika kecenderungan mengguna sut (MPC) adalah 0.8 dan jika perbelanjaan kerajaan (G) meningkat sebanyak $50 manakala pelaburan (1) jatuh $20, berapakah kenaikan pendapatan keseimbangan meningkat?) $12 $30 O $120 $150. Given the condition for equilibrium national income Y = E, and the expenditure equation E=C, where C= Co + by: (a) Describe the constants Co and b. Are there any restrictions on the range of values which b can assume? (b) Find an expression for the equilibrium level of income (the reduced form). (c) Deduce how the equilibrium level of income changes as: (i) b increases. (ii) b decreases.4. Consider the economy is characterised by the following equations: C = co + C1YD T = to + tY t1 E (0,1) Y, = Y – T G and I are both constant. (a) Find the multiplier. (b) Does the economy respond more to changes in autonomous consumption (co), when ti is zero or positive? Explain your answer. (c) Now assume that taxes are lump sum (constant, i.e., T = T), but investment increases with output through the equation I = bo + bịY, what is the new multiplier? (d) Suppose that the parameter bo increases. If we call this parameter the "business confidence", how will equilibrium output be affected by increasing the business confidence? Will total savings go up by this change? Explain your answer.
- 2. Suppose the consumption function of country A is C-1000+ 0.8% (is the disposable income). Investment expenditure is 1500. The government purchase expenditure is 1500. The government transfer payment is 800. Tax is 2050. Please try to calculate: (1) the equilibrium national income Y' (2) the government purchase multiplier K, (3) the tax multiplier K,ASAPAssume that a three-sector economy in Country W. The amount of autonomous consumption is RM300 million with the proportion of an increase in income that is spent on consumption is 0.5. An induced tax of 20% is imposed by the country. The amount of investment is RM250 million, and the amount of government spending is RM150 million. (i) Calculate the national income equilibrium. (ii) Based on your answer in (i), show the aggregate expenditure graph.
- In the country A , autonomous consumption (CA) is 100, marginal propensity to consume (CY) is 0.5, investment expenditure (I) is 50, government spending (G) is 50, lump-sum tax collection (T) is 20 and income tax rate (t) is 0.2. AE = C + I + G According to the information above, fill in the blanks. a) The equilibrium output is: _____________ b) If the lump-sum tax increases to 40, the new equilibrium output is: _______ c) The tax multiplier (numerically) is: ______________Question 3: At a level of National Income of AED 30,000 Million, the government announced an increase in expenditures from AED 1000 Million to AED 1500 Million as a stimulus package for infrastructure development and at the same time government also announced an increase in tax from AED 1000 Million to AED 1600 Million. The marginal propensity to consume (MPC) for the country is 0.75. Find the impact of these changes on National Income. Explain the leakages of multiplier(b)Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300 million with the proportion of an increase in income that is spent on consumption is 0.5. An induced tax of 20% is imposed by the country. The amount of investment is RM250 million, and the amount of government spending is RM150 million. (i)Calculate the national income equilibrium. (ii)Based on your answer in (i), show the aggregate expenditure graph. (iii)Explain what would happen to the national income equilibrium if the investment changes by RM100 million.