EBK MACROECONOMICS
7th Edition
ISBN: 8220106812686
Author: O'Brien
Publisher: PEARSON
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Chapter 12.A, Problem 2RQ
To determine
To determine: The equilibrium GDP.
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MACROECONOMIC
Find equilibrium GDP using the following macroeconomic model (the numbers, with the exception of the MPC, represent billions of dollars):
C = 1,250 + 0.80Y
|= 1,250
G = 2,000
Consumption function
Planned investment function
Government spending function
NX = - 500
Y= C +1+G+ NX
Net export function
Equilibrium condition
The equilibrium level of GDP is $ billion. (Round your answer to the nearest billion dollars
Suppose that a new free trade agreement allows the economy to import cheaper goods from overseas, thereby decreasing the general price level.
Adjust the following graph by either shifting the consumption function curve or the initial point on the consumption function curve (A) to illustrate the impact of a fall in the price level.
Chapter 12 Solutions
EBK MACROECONOMICS
Ch. 12.A - Prob. 1RQCh. 12.A - Prob. 2RQCh. 12.A - Prob. 3RQCh. 12.A - Prob. 4RQCh. 12 - Prob. 12.1.1RQCh. 12 - Prob. 12.1.2RQCh. 12 - Prob. 12.1.3RQCh. 12 - Prob. 12.1.4PACh. 12 - Prob. 12.1.5PACh. 12 - Prob. 12.1.6PA
Ch. 12 - Prob. 12.1.7PACh. 12 - Prob. 12.1.8PACh. 12 - Prob. 12.1.9PACh. 12 - Prob. 12.2.1RQCh. 12 - Prob. 12.2.2RQCh. 12 - Prob. 12.2.3RQCh. 12 - Prob. 12.2.4RQCh. 12 - Prob. 12.2.5RQCh. 12 - Prob. 12.2.6PACh. 12 - Prob. 12.2.7PACh. 12 - Prob. 12.2.8PACh. 12 - Prob. 12.2.9PACh. 12 - Prob. 12.2.10PACh. 12 - Prob. 12.2.11PACh. 12 - Prob. 12.2.12PACh. 12 - Prob. 12.2.13PACh. 12 - Prob. 12.2.14PACh. 12 - Prob. 12.2.15PACh. 12 - Prob. 12.3.1RQCh. 12 - Prob. 12.3.2RQCh. 12 - Prob. 12.3.3RQCh. 12 - Prob. 12.3.4RQCh. 12 - Prob. 12.3.5RQCh. 12 - Prob. 12.3.6PACh. 12 - Prob. 12.3.7PACh. 12 - Prob. 12.3.8PACh. 12 - Prob. 12.3.9PACh. 12 - Prob. 12.3.10PACh. 12 - Prob. 12.3.12PACh. 12 - Prob. 12.4.1RQCh. 12 - Prob. 12.4.2RQCh. 12 - Prob. 12.4.3RQCh. 12 - Prob. 12.4.4PACh. 12 - Prob. 12.4.5PACh. 12 - Prob. 12.4.6PACh. 12 - Prob. 12.4.7PACh. 12 - Prob. 12.4.8PACh. 12 - Prob. 12.4.9PACh. 12 - Prob. 12.4.10PACh. 12 - Prob. 12.4.11PACh. 12 - Prob. 12.4.12PACh. 12 - Prob. 12.4.13PACh. 12 - Prob. 12.4.14PACh. 12 - Prob. 12.5.1RQCh. 12 - Prob. 12.5.2RQCh. 12 - Prob. 12.5.3RQCh. 12 - Prob. 12.5.4PACh. 12 - Prob. 12.5.5PACh. 12 - Prob. 12.5.6PACh. 12 - Prob. 12.1RDECh. 12 - Prob. 12.2CTECh. 12 - Prob. 12.3CTE
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- Nonearrow_forwardLet the national income model be; Y = C + I0 + G , C = a + b ( Y – T) , G = g Y Identify endogenous variables Find the equilibrium national income Find equilibrium consumption(using static equilibrium & matrix algebra botharrow_forwardSuppose that the level of income is $1000 and the tax rate is 0.1 %. Given this data, what is the level of disposable income? Use the following information to answer questions 5 through 8: Consider the following information for Slovenia. Category Amount Autonomous Consumption 430 MPC 0.9 Tax Rate 0.25 Investment 800 Government Expenditure 100 Exports 20 MPI 0.05 What is the equilibrium level of GDP in the income-expenditure model? Suppose that there is a decrease in Exports by $20. What is the new equilibrium level of GDP in the income-expenditure model? What is the difference between the original and new GDP as a result of a decrease in Exports? Suppose that MPC is equal to 0.8. What is the spending multiplier?arrow_forward
- Consider the following is the economy of Country Z: C = 200 + 0.85Y I = 100 Answer the following questions: Calculate the equilibrium level of output algebraically using the saving-investment (S-I) approach. (b) What is the value of saving at the equilibrium output from part (a)? (c) Suppose the investment increases to 200. What is the new equilibrium level of output? Calculate the value using the multiplier approach.arrow_forwardConsider the following is the economy of Country Z: C = 200 + 0.85Y I= 100 Answer the following questions: Calculate the equilibrium level of output algebraically using the saving-investment (S-I) approach.arrow_forwardIn an economy C= 300 + 0.6Y and I= 400 C is denoted to be as the Consumption Y is the Income and I is the Investment. Equilibrium level of Income.?arrow_forward
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