Q: Consumption = 115 + 0.6Y Investment = 550 Calculate the value of autonomous spending.
A: Consumption Function: Consumption functions shows the relationship between income and consumption.…
Q: US Real GDP fell by 9 percent during the 2nd quarter of 2020. Real investment spending fell by 16.9…
A: Investment implies consumption on capital spending, for example purchasing new machines, building…
Q: True/False: Suppose that in the graph showing L (in the x-axis) and MPL (in the y-axis), the MPL…
A: Here, it is given that, on a graph, quantity of labor is placed on x-axis and marginal product of…
Q: An economy with no government and no foreign trade tends to move toward equilibrium GDP because at…
A: GDP is the gross domestic product, the total of all the products, items, services, produced or…
Q: In a closed economy, the demand for the output consists of consumption (C), Investment (I), and…
A: Since you posted multiple questions, we will provide you with the answer to the first question only.…
Q: Given the necessary increase in GDP of $360 and the MPC of 0.70, how much should we reduce taxes to…
A: The multiplier value depends on the marginal propensity consume. The higher the value of MPC ,…
Q: Using more data points results in an estimated MPC of 0.65 for Africa. In December, the Africa…
A: How much investment going to multiply in the economy depends on how much the household sector…
Q: The government of a country decides to double its current level of spending, causing real GDP to…
A: Gross domestic product (GDP): - GDP is the market value of all final goods and services produced in…
Q: Use the information below to answer the following questions. Suppose that in China, investment is…
A: Given that; Investment = ¥190 billion Saving =¥170 billion Government expenditure =¥195 billion…
Q: Which of the following policies can the government implement to stimulate investment? Group of…
A: Investment(I) indicates the spending on services and items, capital(K), and financial assets by…
Q: True or False If spending exceeds output, real GDP will decline as firms cut back on production.
A: If Actual Spending is greater than the Output, then more is being demanded than is being supplied.…
Q: In a closed economy, subsistence consumption is 10 billions, households spend 60% of their net…
A: Given; Subsistence consumption=10 billion Investment= 40 billion Tax= 20 billion Government…
Q: Assume that initial GDP is $1,000 and we want to expand it to $1,600. Average MPC for the country is…
A: Economists use the marginal propensity to save (MPS) to measure the link between income and savings.…
Q: if actual real GDP is greater than the equilibrium level of real gdp what happens to restore…
A: In economics, the final demand domestically can be defined as the total demand for final services…
Q: If MPC is = 0.6 and government spending decreases by dollar 100 billion, what happens to equilibrium…
A: Marginal proepensity to consume = 0.6 Decrease in spending = $100 billion
Q: If total GDP for this economy is $17.04 trillion for the year shown in the table below, what was the…
A: Exporting alludes to the selling of goods and services from the nation of origin to a foreign…
Q: Consider the economy of Canada. Its households spend 55% of increases in their income and saves 45…
A: The problem is to estimate the size of a tax cut necessary in the Canadian economy for the actual…
Q: Suppose real GDP is currently $12.5 trillion and potential real GDP is $13 trillion. If the…
A: Aggregate demand is the sum of consumption spending, Investment spending, Government spending and…
Q: An economy has the potential to produce $230 billion worth of goods and services. Government…
A: An economy has the potential to produce = $230 billion actuall production = $196 billion
Q: Although the United States is one of the richest nations in the world, it is also the world's…
A: Here, it is given that the United States is the world's largest debtor nation as it has very low…
Q: If planned expenditures are below actual production, what will happen to income? Explain the…
A: If planned expenditure is below than the actual production, then the income will decrease. Because,…
Q: In Macroland potential GDP equals $20 billion and real GDP equals $19.2 billion. Macroland has a(n)…
A: A recessionary gap is a macroeconomic term utilized when a nation's real GDP is lower than its Gross…
Q: The actual GDP is currently $100 billion per year and potential real GDP is currently $200 billion.…
A: Use the below formula: GDP gap = Potential GDP - Actual GDP
Q: In a closed economy, what determines consumption, investment, and government expenditures? Please…
A: Gross domestic product is the market value of final goods and services that are produced in an…
Q: How much more output does the $20 trillion U.S economy produce when GDP increases by 1.0 percent?
A: Output – it the total amount of commodities or services produced in a particular time period.…
Q: How do you recommend the government change GDP and taxes to stabilize the economy in each of the…
A: In an economy, government intervenes at the marketplace with its economic policies to deal with the…
Q: if investment spending at each level of output increases by $120 billion, what will equilibrium…
A: Equilibrium Output is the amount of output in an economy where Aggregate Demand equals Aggregate…
Q: If government spending is permanently increased, consumption and investment would fail? True or…
A: Government spending refers to the entirety of the funds disbursed by a government to cover the costs…
Q: If government spending as a percent of potential GDP had just risen from 18% to 20%, what does the…
A: Government expenditure implies the spending made by the government to the purchase of goods and…
Q: If actual GDP is $640 billion and there is a positive GDP gap of $20 billion, potential GDP is
A: Answer: Given, Actual GDP = $640 billion Positive GDP gap = $20 billion Potential GDP: It refers to…
Q: 4.5 Explain and show graphically bow an increase in government spending (ie, budget deficit) affects…
A: Borrowing is defined as the demand for loanable funds. Savings account for the majority of loanable…
Q: If the MPC in an economy is 0.90, a $4 billion increase in government spending will ultimately…
A: Answer: Given, MPC = 0.90 Change in Government spending=44 billion The following formula will be…
Q: If when real GDP equals $800 billion, imports equal $100 billion, and when real GDP equals $900…
A: When real GDP is $800 billion then imports =$100 billionWhen real GDP is $900 billion then imports…
If an economy has a level of real GDP equal to $187 trillion and potential GDP equal to $179 trillion, then the output gap for this economy is
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- The government of a country decides to double its current level of spending, causing real GDP to increase from $20,000 to $120, 000. What is the percent change in real GDP?In a closed economy, what determines consumption, investment, and government expenditures? Please include in your answer the form of the consumption function, investment function, and government expenditure function.In Macroland potential GDP equals $20 billion and real GDP equals $19.2 billion.Macroland has a(n) ______ gap equal to ______ percent of potential GDP.
- if actual real GDP is greater than the equilibrium level of real gdp what happens to restore equilibrium to the economy?Suppose real GDP is currently $12.5 trillion and potential real GDP is $13 trillion. If the president and Congress increased government purchases by $500 billion, what would be the result on the economy?True/False: Suppose that in the graph showing L (in the x-axis) and MPL (in the y-axis), the MPL function is a horizontal line (zero slope). This means that the production function is increasing. true or false?
- If the MPC in an economy is 0.90, a $4 billion increase in government spending will ultimately increase real GDP byHow do you recommend the government change GDP and taxes to stabilize the economy in each of the following scenarios? Economic growth has started slowing and the unemployment rate has increased over the past four months. There has been strong growth in GDP over the past year, unemployment is very low, and inflation has started to rise. Prices are stable, unemployment is low and the economy is growing at an average rate.If government spending is permanently increased, consumption and investment would fail? True or False
- If planned expenditures are below actual production, what will happen to income? Explain the process by which this happens.Using more data points results in an estimated MPC of 0.65 for Africa. In December, the Africa government announced an increase in spending of 12 billion . Assuming that everyone spends according to the MPC of 0.65, which is the maximum increase in final spending that could occur?Consider the economy of Canada. Its households spend 55% of increases in their income and saves 45 %. There are no taxes and no foreign trade. Currently, Canada has a recessionary gap, the governments aim is to get actual output to increase by 220 billion dollars. How much of a tax cut do they need to have to achieve the overall increase in output of 220 billion dollars?