Let's say the autonomous Investment = $5,000, autonomous consumption = $12000, autonomous government expenditures = $3,000, autonomous net exports = - $2,000, and the mpe = .6. Now there is a banking crisis, and Investment drops $2,500. What is equilibrium GDP? Question 8 options: $15,500 $33,500 $48,750 $38,750 2

Let's say the autonomous Investment = $5,000, autonomous consumption = $12000, autonomous government expenditures = $3,000, autonomous net exports = - $2,000, and the mpe = .6. Now there is a banking crisis, and Investment drops $2,500. What is equilibrium GDP? Question 8 options: $15,500 $33,500 $48,750 $38,750 2

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter10: Income And Expenditures Equilibrium

Section: Chapter Questions

Problem 14E

See similar textbooks

Similar questions

Question 45 5 pts Potential GDP equals $500 billion. The economy is currently producing GDP equal to $400 billion. If the MPC is 0.52, then autonomous spending must change by $ billion for the economy to move to potential GDP? Please round to two decimal places where needed. Question 46 5 pts Suppose Ford plans to produce 9.2 million trucks this year. The company expects to sell 7.5 million. Suppose that at the end of the year, Ford has sold 7.3 million trucks. What is the level of planned inventories? Please round to the nearest one-decimal and enter as millions. For example, if your answer was 4,500,000 you would enter the number 4.5. Question 47 5 pts An economy sees consumption increase by $2,792 million when disposable income increases by $4,770. Assuming the marginal propensity to consume remains constant, what is the marginal propensity to save? Please round to the closest two decimal places.
Suppose the interest on the debt was $700 billion. If interest is paid domestically, 90% will be spent domestically (the remainder is spent on foreign goods). If interest is paid to the foreign sector, only 10% is spent here (the remainder is spent in foreign countries). Every dollar collected in axes to pay the interest cause domestic spending to fall 90 cents. The spending multiplier is 2. d) What is the net impact on GDP if all interest is paid domestically?
Please answer everything in photos. Last question is asking which would send a signal to firms to decrease production/keep production the same/increase production.
Use the information in the table to answer the following questions. All numbers are in billions of 2012 dollars. Planned Investment (1) Real GDP (Y) $14,000 $15,000 $16,000 $17,000 $18,000 The equilibrium level of GDP is $ The MPC is billion. Consumption (C) $11,000 $11,750 $12,500 $13,250 $14,000 $1,500 $1,500 $1,500 $1,500 $1,500 (enter your response to two decimal places). Suppose that net exports increase by $400 billion. Using the multiplier formula, determine the new level of GDP. A $400 billion increase in net exports leads to a change in spending of $ billion, so the new level of GDP will be $ billion. Government Purchases (G) $2,500 $2,500 $2,500 $2,500 $2,500 Net Exports (NX) - $500 - $500 - $500 - $500 - $500
Answer the following questions, which relate to the aggregate expenditures model:a. If Ca is $100, Ig is $50, Xn is -$10, and G is $30, what is the economy’s equilibrium GDP?b. If real GDP in an economy is currently $200, Ca is $100, Ig is $50, Xn is -$10, and G is $30, will the economy’s real GDP rise, fall, or stay the same?c. Suppose that full-employment (and full-capacity) output in an economy is $200. If Ca is $150, Ig is $50, Xn is -$10, and G is $30, what will be the macroeconomic result?
Suppose the marginal propensity to consume is 0.8, the marginal propensity to import is 0.2, and autonomous expenditure is 300. What is the equilibrium value of GDP? Answer:
With an MPC of 0.8, government spending increases $20 billion while taxes decrease $10 billion. Based on this data, what is the cumulative effect on GDP?
Equations for C, I, G, and NX are given below. If the equilibrium level of GDP is $32,000, what will the new equilibrium level of GDP be if government spending increases to 2,500?C = 5,000 + (MPC)YI = 1,500G = 2,000NX = -500
Suppose you have the following information about a fictitious economy. Assume there are no taxes in this economy. Disposable Income and Consumption Disposable Income Consumption (dollars) $12,000 20,000 28, 000 (dollars) 12,000 24,000 36,000 36, 000 48, 000 44 ,000 60, 000 52,000 Instructions: In parts a and c, enter your answers as a whole number. In part b, round your answers to 2 decimal places. a. What is the equilibrium level of consumption? b. What is the MPC and MPS for this economy? MPC: MPS: c. What is the value of autonomous consumption for this economy?
A $300 million decrease in investment spending will increase real GDP by more than $300 million. Is this a true statement? What is the relationship between investment spending and the GDP? I think that investment spending goes directly into the economy so I believe the answer to be true. But I am not sure.
The table below shows data for three fictitious countries. a. Compute the current MPC for each country. Instructions: Round your answers to two decimal places. Income and Consumption Data, Three Countries Change in Income (dollars) $9,830 40,000 5,870 Change in Consumption (dollars) $6,789 31,650 5,500 b. Which country has the highest marginal propensity to save (MPS)? (Click to select) c. If income in Bedrup increases by $360 and income in Cedrup increases by $690, which of the following statements is correct? Country Adrup Bedrup Cedrup MPC O Neither Bedrup nor Cedrup will save any dollars. O Cedrup will save more dollars. O Bedrup will save more dollars. O Dollar savings will be the same for both Bedrup and Cedrup.
Answer the following questions, which relate to the aggregate expenditures model: Instructions: Enter your answer as a whole number. a. If Ca is $130, lg is $60, X, is -$10, and G is $40, what is the economy's equilibrium GDP? $ b. If real GDP in an economy is currently $250, Ca is $130, l is $60, Xn is –$10, and G is $40, will the economy's real GDP rise, fall, or stay the same? |(Click to select) c. Suppose that full-employment (and full-capacity) output in an economy is $250. If Ca is $180, Ig is $60, Xn is -$10, and Gis $40, what will be the macroeconomic result? O There will be an inflationary expenditure gap and employment levels will be above the full-employment level. O There will be an inflationary expenditure gap and employment levels will be below the full-employment level.