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- Exercise D24 Compare two policies: a tax cut on income or an increase in government spending on roads and bridges. What are both the short-term and long—term impacts of such policies on the economy?Suppose a closed economy has a national income of $260 milion. $535 midon in private savings, $200 millon worth of tax evenue, and $150 milion in govemment spenting what is the consumprion expenditure in this economy? Os125 milion Os155 milion OS385 mition Ossa5 milion OS645 milionIn the GDP equation, business spending is referred to as: O Consumption Investment O Government O Net Exports
- 25 1 Calculate the equilibrium level of investment if you have the following equations: C=0.4Yd+20, national income is 1000, government expenditures is 200, tax is 50 Investment =300 O Investment-D350 O Investment3D400 O Investment3D450 O None of the above OGDP $0 1 2 Consumption $0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 D 8 4.5 As shown in Exhibit 9-1, if equilibrium GDP is $5 trillion, then the total of investment, government spending, and net exports is: 8 4.5 As shown in Exhibit 9-1, if equilibrium GDP is $5 trillion, then the total of investme O $1 trillion. $2 trillion. O $3 trillion. O $4 trillion. $6 trillion. 4 Aggregate Expenditures 6 Unplanned inventoryWhen government statisticians gather and analyze data on the incomo of varQus agents in the demostic e ero moasuringIGOP uning the O A. expenditure-based accounting method OB. production-based accounting method. OC. circular flow based accounting method. O D. income-based accounting method. The national income accounting identity associated with the expenditure-based accounting method is represented by O A. Y C+1+G+M-X OB. Y=X-M+1+G OC. Y C+1+G+X OD. C Y+ 1+G+M-X OE Y C+1G+X-M Click to select your answer.
- Match each definition to the appropriate component of aggregate demand. Definition The sum of the expenditures of business firms on new plant, equipment, and software and of households on new homes The goods and services purchased by all levels of government The total amount spent by consumers on newly produced goods and services The difference between exports and imports ⒸNet exports O Government spending Consumer Expenditure Which of the following components represents the largest piece of aggregate demand? O Consumer expenditure O Investment spending O Which of the following components represents the smallest piece of aggregate demand? O Consumer expenditure O Government spending O Investment spending ONet exports Investment Spending Government Spending Net Exports O O O OImagine there is a consumption smoother (also known as a PIH consumer) who expectsto live for another 40 years and to work for another 30 years. They just learned thatthey will receive a permanent pay increase from their job of $800. How much extra dothey consume this year? What is their marginal propensity to consume?Using the following equation calculate the equilibrium income C=100 + 0.5Y G-500 1-600 Export=60 Imports =75 Select one: 0a None of the above O6 2430 Cc 1215. d. 2370