Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Chapter 23, Problem 10P
To determine
To explain:
The reason behind an unplanned inventory in the aggregate expenditure model changes the key to
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- An economy is described by the following equations: C= 1500 + 0.75(Y - T) po = 800 G= 1500 X = 100 M=0 T=1500 †=0 Y* = 12000 a) Find a numerical equation linking planned aggregate expenditure to output. b) Find its exogenous expenditure and induced expenditure in this economyarrow_forwardWhy can’t an economy with a MPC greater than one reach a stable equilibrium in the aggregate expenditure model?arrow_forwardWhat are the determinants of aggregate demand? How do these determinants differ from the determinants of aggregate expenditure? What is the significance, if any, of these differences?arrow_forward
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- Calculate the value of consumption expenditure from the following:- National income = $6000 Autonomous consumption = $1000 Marginal propensity to consume = 0.80arrow_forwardIdentify the direction of the change during a recession in each of the following: consumption expenditures, investment expenditures, and unemployment.arrow_forwardWhat will be the short-run effect of the shift in the reaction function on GDP?arrow_forward
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