Refer to the information provided in Figure 8.12 below to answer the questions that follow.AEAEAE1,000B60027045A 1,000 1,500Aggregate output ($ millions)Figure 8.12Refer to Figure 8.12. Suppose the economy's aggregate expenditure line is AE 1. A$10 million increase in planned investment causes aggregateequilibrium output to increase toSelect one:O a $1.010.0 million.O b. $1.016.7 million.O. $1,125.5 million.O d. $1.215.6 million.(suou )sampuacha apubay

The aggregate output (Y) in the economy is multiplier (m) times the autonomous part of aggregate…

Refer to the information provided in Figure 8.12 below to answer the questions that follow. AE AE AE 1,000 B 600 270 45 A 1,000 1,500 Aggregate output ($ millions) Figure 8.12 Refer to Figure 8.12. Suppose the economy's aggregate expenditure line is AE . A$10 million increase in planned investment causes aggregate equilibrium output to increase to Select one: O a $1.010.0 million. Ob. $1.016.7 million. Oc $1.125.5 million. Od. $1.215.6 million. (suou s) sampuada apuba£by

Refer to the information provided in Figure 8.12 below to answer the questions that follow. AE AE AE 1,000 B 600 270 45 A 1,000 1,500 Aggregate output ($ millions) Figure 8.12 Refer to Figure 8.12. Suppose the economy's aggregate expenditure line is AE . A$10 million increase in planned investment causes aggregate equilibrium output to increase to Select one: O a $1.010.0 million. Ob. $1.016.7 million. Oc $1.125.5 million. Od. $1.215.6 million. (suou s) sampuada apuba£by

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Use the initial settings (or any other non-zero value) for the Change in Autonomous Spending and MPC. Click the "Spending Rounds" button at the top of the Settings window. Which of the following describes how the Change in Spending value in each row is related to the Disposable Income value in the same row? O In each row, Change in Spending is Disposable Income minus MPC*(Change in Autonomous Spending). Change in Spending in each row is MPC x Disposable Income for that row. O Change in Spending is always half of Disposable Income. O Change in Spending is Disposable Income times the spending multiplier.
.Refer to the information provided in Figure 8.9 below to answer the questions that follow AE 225 200 175 150 45 100 200 300 Aggregate output ($ millions) Figure 8.9 Refer to Figure 8.9. How will equilibrium aggregate expenditure and equilibrium aggregate output change as a result ?of a decrease in investment by $20 million AE line shifts down, increasing equilibrium output and equilibrium expenditure a O AE line shifts up, increasing equilibrium output and equilibrium expenditure b O AE line shifts down, decreasing equilibrium output and equilibrium expenditure .c O AE line shifts down, increasing equilibrium output and decreasing equilibrium expenditure .d O Aggregate expenditures ($ millions)
Question 19 The expenditure line O is steeper than the 45-degree line. O slopes upward because consumption depends positively on income. O slopes upward because the MPC is less than 1. slopes upward because consumption and investment depend positively on income. O shows the relationship between consumption spending and income. D Question 20 Between December 2007 and June 2009, the United States economy was in recession and millions of jobs were lost. the United States economy moved upward and millions of jobs were created. the United States economy grew, but not many jobs were created. the United States economy moved downward, but still many jobs were created. the United States economy remained stationary.
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Figure 3 45° line 20 16 12 1.2 4 Disposable income (trillions of 2005 dollars) 8 12 16 20 24 Refer to Figure 3. The marginal propensity to consume equals * 0.80 0.90 0.75 0.85 Consumpfion expenditure (trillions of 20050 dollars}
10:35 PM A O 60 Aggregate Expenditures Schedule 50 Tools 40 C+1 Equilibrium 30 20 10 10 20 30 40 50 Real GDP (billions of dollars) Instructions: In part b, enter your answer as a whole number. In part c, round your answer to 1 decimal place. b. What is the equilibrium GDP for this country? billion c. What is the marginal propensity to consume for this country? Aggregate expenditures (billions of dollars)
All of the following are true when there is an unplanned decrease in inventories, except: O a. Actual investment is greater than planned investment O b. Real GDP will be rising O c. GDP is less than aggregate expenditures O d. Saving is less than planned investment
4. Planned expenditure and income The following table shows consumption (C), investment spending (I), and government purchases (G), in a hypothetical economy for various levels of income. Also assume that there is an income tax rate of 25%, that base consumption is $100 billion, and that the MPC is 0.333, or 1/3. This economy is closed, with no international trade, therefore net exports are equal to zero and should not be considered. Use the given information to fill in disposable income, consumption, and planned expenditures in the following table. Income: Real Disposable (After Tax) Planned GDP Income C I, G Expenditures (Billions of (Billions of dollars) (Billions of (Billions of (Billions of (Billions of dollars) dollars) dollars) dollars) dollars) 100 50 150 100 50 150 200 50 150 300 50 150 400 50 150 500 50 150
Answer all four questions based on the following diagram. 1. Calculate the MPC in the above diagram. 2. Based on Diagram 1, If private Investment of $100 is added to the existing C, calculate the new equilibrium level of NI. 3. Given your answer to the previous question (question #2) calculate by how much G should change, if the full employment level in the economy is at $3000. 4. Based on the answer to the previous question (question #3), if half of those government expenditures are financed through lump sum taxes, calculate the new level if NI? (C+I+G)
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ADVANCED ANALYSIS Assume that the consumption schedule for a private closed economy is such that consumption is: C = 100 + 0.75Y Assume further that planned investment Ig is independent of the level of real GDP and constant at Ig = 50. Recall also that, in equilibrium, the real output produced (Y) is equal to aggregate expenditures: Y = C + Ig Instructions: Enter your answers as whole numbers.a. Calculate the equilibrium level of income or real GDP for this economy. Equilibrium GDP (Y) = $ . b. What happens to equilibrium GDP if Ig changes to 60? Equilibrium GDP (Y) = $ . What does this outcome reveal about the size of the spending multiplier? Spending multiplier = .
10.pr3 Following is a saving and investment schedule indicating that planned investment is constant 360 11 13 15 17 15 15 15 15 15 a) The equilibrium real GDP is $And saving and investment are both b The MPS and the multiplier is AS2 rise in the g schedule will cause real GDP to tie by S d) Use the investment schedule given in the table and assume a 52 increase in the saing schedule in the table that is, saving at every real GOP increase by S and at this real GOP, saving 4.1. Equilibrium real GDP will to.5 15 will be S d.2. The amount by which real GDP changes depends on the size of the change in the saving schedule and the size o