Economics: Principles and Policy (MindTap Course List)
13th Edition
ISBN: 9781305280595
Author: William J. Baumol, Alan S. Blinder
Publisher: Cengage Learning
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Question
Chapter 26, Problem 4TY
To determine
Calculate the equilibrium level of
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不
Fill in the missing values in the following table. Assume that the value of the MPC does not change as real GDP changes and that there are zero taxes. (Enter all values as whole numbers.)
Real GDP
()
Consumption
(C)
Planned
Investment (/)
Government
Purchases (G)
Net
Exports (NX)
$15,000
$10,500
$1,500
$1,300
- $375
$16,000
$11,200
$1,500
1,300
- $375
$17,000
$1,500
1,300
- $375
$18,000
$1,500
1,300
- $375
$19,000
$
$1,500
1,300
- $375
Solve it correctly and details
Q1:You are given the following income-expenditures model for an economy :
Consumption C = 300 + .64Yd
Tax (T) = $60
Government expenditure G = $100
Investment (I) = $120
From above data calculate the follows:
1. Equilibrium level of income
2. At the equilibrium level of income, what is the amount of consumption?
Chapter 26 Solutions
Economics: Principles and Policy (MindTap Course List)
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- TOPIC: Comparing total expenditures and total productionarrow_forwardIn a simple economy (assume there are no taxes, thus Y is disposable income), the consumption function is C= 100 +0.75Y Investment is equal to 400. In this economy, equilibrium GDP is $ (Round your answer to the nearest dollar) 1.) Using the point drawing tool, on the graph to the right, indicate the real GDP point that you found above Label the point 'E' 2) Using the line drawing tool, carefully graph the consumption plus investment line Properly label your line Carefully follow the instructions above, and only draw the required objectsarrow_forward42)Consider the following consumption function: C = 800 + 0.75 YD for the fictitious economy of Zapland. If the government increases taxes AND increases government purchase by $200 million, then the change in GDP is Select one: a. $1 million b. - $1 million c. $100 million d. $200 million e. $1,000 millionarrow_forward
- 1. Answer the following: A) In 2011 the United States economy had a GDP of $14,991 billion according to the United Nations. If consumption was $10,729 billion, government spending was $2,594 billion, and net exports was -$568 billion, how much was investment spending? B) In 2011 the United States economy had a GDI (Gross Domestic Income) of approximately $13,548 billion according to the Bureau of Economic Analysis. If wages were $8,340 billion, interest payments were $516 billion, and rent was $430 billion, approximately how much was remaining for profit?arrow_forward1. Use the following information from a fictional economy: Consumption, C = 250 + 0.8 Yd Investment, I = 200 Government Spending, G = 100 Taxes, T = 0.2 Y Net Exports, NX = 50 - 0.4 Y Disposable Income, Yd = Y-T %3D Real GDP = Y %3D (a) What is equilibrium Real GDP (Y) for this economy? (b) What is equilibrium C for this economy? (c) What is equilibrium NX for this economy? (d) What is equilibrium T for this economy? (e) What is equilibrium YD for this economy?arrow_forwardSuppose an economy is described by the following equations: Y = C + I + G + X – M C = 14 + 0.60Yd I = 20 G = 20 X = 15 M = 5 +0.1Y T = 20 + 0.4Y Where Y is domestic income Yd is private disposable income C is aggregate consumption spending T is government tax revenue I is investment spending G is government spending E represents exports M represents imports of goods and services. (a) Find out the equilibrium value of income. (b) What is the value of export multiplier?arrow_forward
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