5:06A & & & P MPage 4 of 5QUESTION 4The figure below shows the planned Aggregate Expenditure function for a hypothetical economy(AEp = 1,000 + 0.5 * Y). In this economy, taxes and transfers are equal to zero, so YD =Y. Whatis the value of unplanned investment expenditure (Iµ) when GDP = 3,000? Suppose that, nextperiod, autonomous consumption increased by 100 and every thing else remained the same.Under these new circumstances, what would the value of unplanned investment be when GDP =3,000?5,0004, 5004, 0003, 5003,000AEp = 1,000 + 0.5*Y2, 50020001, 5001,a005005001,0001, 5002,0002 5003,0003,5004,0004,5005,000REAL GDPPage 5 of 5QUESTION A5a. Suppose that some kind of significant economic event has occurred, and you learn thatthe event will de finitely cause the aggregate price level to decrease, but that its effect onshort-run equilibrium real GDP cannot be determined without knowing the exactPLANNED AGGREGATE EXPENDITURE

The aggregate expenditure function is AEp=1000+0.5Y This is ex-ante or planned expenditure. The GDP…

QUESTION 4 The figure below shows the planned Aggregate Expenditure function for a hypothetical economy (AEp = 1,000 + 0.5 * Y). In this economy, taxes and transfers are equal to zero, so YD = Y. What is the value of unplanned investment expenditure (Iu) when GDP = 3,000? Suppose that, next period, autonomous consumption increased by 100 and everything else remained the same. Under these new circumstances, what would the value of unplanned investment be when GDP = 3,000?

QUESTION 4 The figure below shows the planned Aggregate Expenditure function for a hypothetical economy (AEp = 1,000 + 0.5 * Y). In this economy, taxes and transfers are equal to zero, so YD = Y. What is the value of unplanned investment expenditure (Iu) when GDP = 3,000? Suppose that, next period, autonomous consumption increased by 100 and everything else remained the same. Under these new circumstances, what would the value of unplanned investment be when GDP = 3,000?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Aggregate Expenditures and Multipliers Assignment a. Using the aggregate expenditure function above, what is the current level of real GDP? b. Using the aggregate expenditure function above, what would be the level of real GDP if the aggregate expenditure function shifted up by $0.2T? c. If Investment expenditures increase by $300B and MPC is equal to 0.90, what will be the increase in real GDP? d. If Government expenditures increase by $800B and MPS is equal to 0.05, what will be the increase in real GDP?
A simple closed economy with government sector is given by the following equations: C = 10 + 0.75 Y I = 20 G = 40 where C is aggregate consumption, Y is national income, G is government expenditure on goods and services, and I is investment expenditure. Note that there are no taxes assumed in parts (a) to (c). (a) What is the equilibrium level of national income? Show all your workings. (b) What is the value of aggregate consumption and the value of aggregate savings at the equilibrium level of the national income? Show all your workings. (c) What would be the new level of national income if government expenditure increased by 10? Show all your workings and explain the mechanisms through which the economy reaches a new equilibrium. (d) If a tax rate of 1/3 of national income were introduced, what would be the new equilibrium level of national income in the economy outlined above. Show all your workings and explain the mechanisms through which the economy reaches the new equilibrium.
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 $38,750 2
The following questions refer to this table:
Suppose that autonomous consumption is 2,190, government purchases are 590, taxes are 0, planned investment spending is 648, net exports are -132, and the MPC is 0.71. What is the value of autonomous spending? Round your answer to the closest 2 decimal places if needed. Do not enter dollar signs ($) in your answer.
Suppose that a certain country has an MPC of .9 and a real GDP of $400 billion. If its investment spending decreases by $4 billion, what will be its new level of real GDP?
15. Total expenditures in a country (in billions of dollars) are increasing at a rate of f(x) = 8.22x+87.13, where x = 0 corresponds to the year 2000. Total expenditures were $1584.9 billion in 2002. a. Find a function that gives the total expenditures x years after 2000. b. What will total expenditures be in 2016? a. What is the function for the total expenditures? F(x)= (Simplify your answer. Use integers or decimals for any numbers in the expression.) b. In 2016, total expenditures will be S (Type an integer or a decimal.) billion.