Macroeconomics (MindTap Course List)
10th Edition
ISBN: 9781285859477
Author: William Boyes, Michael Melvin
Publisher: Cengage Learning
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Question
Chapter 10, Problem 2E
To determine
To calculate:
The equilibrium level of real GDP in a closed economy with the help of the mentioned table. Also, calculate the value of spending multiplier.
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Students have asked these similar questions
Given the following: consumption = 400, investment = 100, government expenditure = 50 and net export = 20,
what is the economy’s equilibrium GDP?
Answer the question on the basis of the following table for a particular country in which C is consumption expenditures, Ig is gross investment expenditures, G is government expenditures, X is exports, and M is imports. All figures are in billions of dollars. Each question is independent of other question using the same table, unless otherwise stated.
Price Level
C
Ig
G
X
M
Real GDP
128
$18
$2
$3
$1
$5
125
$20
$4
$3
$2
$4
122
$22
$6
$3
$3
$3
119
$24
$8
$3
$4
$2
116
$26
$10
$3
$5
$1
Refer to the table. The real-balances effect of changes in the price level is:
Group of answer choices
shown by columns (1) and (5) of the table.
shown by columns (1) and (4) of the table.
not shown by the data in the table.
shown by columns (1) and (2) of the table.
The table below shows data for three fictitious countries.
a. Compute the current MPC for each country.
Instructions: Round your answers to two decimal places.
Income and Consumption Data, Three Countries
Change in
Income
(dollars)
$9,830
40,000
5,870
Change in
Consumption
(dollars)
$6,789
31,650
5,500
b. Which country has the highest marginal propensity to save (MPS)?
(Click to select)
c. If income in Bedrup increases by $360 and income in Cedrup increases by $690, which of the following statements is correct?
Country
Adrup
Bedrup
Cedrup
MPC
O Neither Bedrup nor Cedrup will save any dollars.
O Cedrup will save more dollars.
O Bedrup will save more dollars.
O Dollar savings will be the same for both Bedrup and Cedrup.
Chapter 10 Solutions
Macroeconomics (MindTap Course List)
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- Nonearrow_forwardWhat is the aggregate expenditures function?arrow_forwardDiscuss which of the following fall into the categories of consumption, investment, government expenditure and net exports from the Y = C + I + G + NX (X – M) identity, and whether the impact is to increase or decrease GDP.Thomas buys a new housearrow_forward
- what ia aggregate spendingarrow_forwardThe 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?arrow_forwardQuestion 45 5 pts Potential GDP equals $500 billion. The economy is currently producing GDP equal to $400 billion. If the MPC is 0.52, then autonomous spending must change by $ billion for the economy to move to potential GDP? Please round to two decimal places where needed. Question 46 5 pts Suppose Ford plans to produce 9.2 million trucks this year. The company expects to sell 7.5 million. Suppose that at the end of the year, Ford has sold 7.3 million trucks. What is the level of planned inventories? Please round to the nearest one-decimal and enter as millions. For example, if your answer was 4,500,000 you would enter the number 4.5. Question 47 5 pts An economy sees consumption increase by $2,792 million when disposable income increases by $4,770. Assuming the marginal propensity to consume remains constant, what is the marginal propensity to save? Please round to the closest two decimal places.arrow_forward
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