Suppose a closed economy with no government spending or taxing is capable of producing an output of $3,000 at full employment. Suppose also that autonomous consumption is $400, intended investment is $200, and on average households will save 25 cents of every additional dollar of income they receive. Calculate the following (express your answers as whole numbers without decimals, commas, dollar signs, or anything else). Multiplier: Value of output (Y) in equilibrium: Total consumption in equilibrium

Suppose a closed economy with no government spending or taxing is capable of producing an output of $3,000 at full employment. Suppose also that autonomous consumption is $400, intended investment is $200, and on average households will save 25 cents of every additional dollar of income they receive. Calculate the following (express your answers as whole numbers without decimals, commas, dollar signs, or anything else). Multiplier: Value of output (Y) in equilibrium: Total consumption in equilibrium

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Suppose a closed economy with no government spending or taxing is capable of producing an output of $3,000 at full
employment. Suppose also that autonomous consumption is $400, intended investment is $200, and on average households
will save 25 cents of every additional dollar of income they receive. Calculate the following (express your answers as whole
numbers without decimals, commas, dollar signs, or anything else).
Multiplier:
Value of output (Y) in equilibrium:
Total consumption in equilibrium
---- ----

Suppose the economy is in equilibrium, and assume no government or foreign sector. If total saving equals 41750, then
intended investment must equal...

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1) Determine the value of the multiplier for this economy, and find the equilibrium value of Y.
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