This question is based on the following information regarding a goods market model: Autonomous consumption R450 million Government spending = R300 million Taxes = R200 million Marginal propensity to consume = 3/4 = At an equilibrium income level of R2 400 million, the consumption spending is equal to ... Select one: A. R2 100 million B. R1 650 million C. R2 250 million D. R2 550 million

This question is based on the following information regarding a goods market model: Autonomous consumption R450 million Government spending = R300 million Taxes = R200 million Marginal propensity to consume = 3/4 = At an equilibrium income level of R2 400 million, the consumption spending is equal to ... Select one: A. R2 100 million B. R1 650 million C. R2 250 million D. R2 550 million

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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An economy is described by the following: C=20+0.9Y I=120-200r. Md=250+0.2Y-400r. Ms/P=1250 Y=70 W=17.5 Lf=144 a) Find AS and AD. b) Find the equilibrium level of Y and P c) Graphically represent this economy d) Find the long-run Y of this economy. e) What is the level of government expenses G, the government needs to impose in order to lead the economy to the full employment? (Show the long-run graphically).
Please help with this q for eco
The sub-part a-b was already answered
a) Calculate the national income equilibrium. b) Based on your answer in (a), show the aggregate expenditure graph. c) Explain what would happen to the national income equilibrium if the investment changes by RM100 million.
Behavioural and Structural equations of an economy are given below: C = 200 + b (Y – 100 – tY) I = 100 G = 100 X = 20 M = 10 + 0.1Y The marginal propensity to consume ‘b’ is equal to 0.8 and proportional income tax rate, t = 0.25. Find the equilibrium national income; Find the value of foreign trade multiplier & equilibrium value of imports If equilibrium national income falls short of full employment income by Rs100, how much government should increase its expenditure to attain full – employment?
Suppose you have an open economy with Government sector imposing tax to finance its expenditures. This economy is described as follows: (in billion dollars) C = 250 + 0.85YD where tax rate is 10 percent. autonomous investment expenditures are 140 billion dollars, autonomous government expenditures are 80 billion dollars, autonomous transfer payments are 100 billion dollars, NX = 0 a) Calculate the equilibrium level of income in this model. b) Calculate the multiplier. c) Calculate the tax revenues (TA). d) Calculate the budget surplus. e) If investment expenditures decrease by 25 billion dollar what would be the change in equilibrium income? How much is the new equilibrium income?
You can use the AE model to show that an increase in government purchases can increase output but in many cases it is hard to find useful things for the government to quickly spend money on. Many people in Boston say "the T is so slow, why not spend it on building or replacing the subway lines?" but new subways lines can take years to plan. A fast alternative is to cut net taxes by sending people transfer payments. Consider a standard AE model with this consumption function, C=4+0.5Y-bT and unknown and unimportant values for planned investment and planned government purchases. What is the "T multiplier," which is defined as the change in equilibrium income per $1 increase in taxes? -b -2b +b +2b O O O O
(1) Consumption function: C = 100 + .8Y (2) Planned investment: I = 38 (3) Government spending: G = 75 (4) Exports: EX = 25 (5) Imports: IM = .05 Y4 (6) Disposable income: Y = Y- T (7) Taxes: T= 40 (8) Planned aggregate expenditure: AE = C+I+ G+ EX– IM (9) Definition of equilibrium income: Y = AE
Income Expenditures 0 100 100 150 200 200 300 250 Refer to the table above to answer the following: (a) At an income level of $200, how much is autonomous expenditures and how much is induced? (b) Given the expenditures function AE = $4,000 + 0.6Y and income of $1,000, how much is spent and how much is induced?
Question 3 of 16 Income and consumption changes for five people are shown in the table. Given this information, rank the marginal propensities to consume (MPC) for the five people from largest to smallest. Largest MPC Smallest MPC Answer Bank Bert Doug Eli Carter Al Name Income change Consumption change Al +$5,000+$5,000 +$3,000+$3,000 Bert +$2,500+$2,500 +$800+$800 Carter +$1,000+$1,000 +$800+$800 Doug −$2,500−$2,500 −$1,750−$1,750 Eli −$5,000−$5,000 −$2,000−$2,000
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1a) and b)