Refer to the Information provided in Figure 8.11 below to answer the questions that follow. Aggregate expenditures ($ millions) 200 50 Figure 8.11 45° AE 200 Aggregate output ($ millions) Refer to Figure 8.11. A $10 million decrease in autonomous consumption Select one: O a. changes equilibrium output to $120 million. O b. increases the MPS. c. changes equilibrium expenditure to $160 million. d. increases the MPC.

Refer to the Information provided in Figure 8.11 below to answer the questions that follow. Aggregate expenditures ($ millions) 200 50 Figure 8.11 45° AE 200 Aggregate output ($ millions) Refer to Figure 8.11. A $10 million decrease in autonomous consumption Select one: O a. changes equilibrium output to $120 million. O b. increases the MPS. c. changes equilibrium expenditure to $160 million. d. increases the MPC.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1.The marginal propensity to consume in this economy is 2.The equilibrium level of output in this economy is
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Refer to the information provided in Table below to answer the question that follow. Planned Output Net Consumption Investment Government (Income) Taxes Spending Spending Purchases T C G 500 100 400 150 50 1,000 100 800 150 50 1,500 100 1,200 150 50 2,000 100 1,600 150 50 2,500 100 2,000 150 50 Refer to Table The equilibrium level of output is Select one: a. $2,000 b. $2,500 c. $1000 d. $1,500 billion.
QUESTION 6 Potential GDP Aggregate expenditure AE, 45° Y. Real GDP (Y) When real GDP is greater than Yo in the diagram above: O A. - inventories will decrease OB. ·Aggregate expenditure will be less than Real GDP OC. Aggregate expenditure will be equal to Real GDP OD. O D. inventories will increase QUESTION 7 Y G Xn $1,000 $1,400 1,400 1,400 1,400 1,400 $0 $800 -$200 2,500 5,000 7,500 10,000 2,300 3,800 5,300 6,800 1,000 1,000 1,000 1,000 -200 -200 -200 -200 Suppose you are given the data in the table above for a hypothetical economy. All data are in billions of dollars. Yis actual real GDP, and C, Ip, G, and Xn are the consumption, planned investment, government purchases, and net exports components of aggregate expenditures, respectively. Calculate the equilibrium GDP (give your answer in billions of $) Aggregate Expenditure
Question 1) a) In panel (a) the curve shifts upward, what could cause this? O Increase in G (govermment spending)O Decrease in HH wealth due to a decrease in housing pricesO An increase in the overall price levelo Areduction in govemment spending (G) b) Using Figure 2, if this economy is currently at Y1 and consumer wealth increases, then___O AD1 will shift to the left, reflecting a decrease in the real GDP at every price level.O AD1 willshift to the right. reflecting an increase in the real GDP at every price level.O an upward movement along the AD1 wiltake place., reflecting an increase in the price level.O a downward movement along the AD1 will take place, reflecting a decrease in the price level.
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(a) Suppose the price level in an economy rises while the money wage rate remains constant. What happens to the quantity of real GDP supplied. How will this affect the aggregate supply or aggregate demand curve? What if the potential GDP increases? Which aggregate curve is affected and how? (b) Real GDP Consumption Planned Investment Government Purchases Net Exports $1,000 $1,000 $100 $150 -$50 2,000 1,900 100 150 -50 3,000 2,800 100 150 -50 4,000 3,700 100 150 -50 From the table data provided, answer the following questions. The numbers in the table are in billions of dollars. Show all calculations. a. What is the equilibrium level of real GDP? b. What is the Marginal Propensity to Consume? c. What is the multiplier value in this economy? d. If potential GDP is $4,000 billion, is the economy at full employment? If not, what is the condition of the economy? e. If the economy is not at full employment, by how much should government spending…
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