Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 36, Problem 4.2P
To determine
The best fits values in the given consumption functions.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Consider the data presented in the table:
Actual
aggregate
expenditure
or output Consumption Planned
(Y)
(C)
(billions
(billions
of $)
of $)
500
300
600
350
700
400
800
450
900
500
Unplanned
Government Net investment
spending exports (inventory
(NX) change)
investment (G)
(billions (billions (billions (billions
of $)
of $)
of $)
of $)
100
-100
-50 S
ol C
150
150 C
150 S
150 C
150 C
100
100 C
100 C
100 C
Based on the assumptions of the aggregate expenditure model, fill in the
columns for planned investment, government spending, and net exports.
Instructions: Enter the values into the table above.
50
50 €
50 C
50 S
50 S
a. For each level of actual aggregate expenditure, calculate unplanned
inventory investment.
correct.
Instructions: Enter the values into the table above. If the value is negative, then
be sure to enter a minus sign.
b. What is the equilibrium level of aggregate expenditure in this economy?
Instructions: Enter a number rounded to the nearest whole number.
Answer is…
Given the scatter diagram in Figure 8-1, what is the MPC (your best estimate)?
a.
1
b.
2/3
c.
1/2
d.
1/3
I know the answer of this question
answer is 2/3 but can you please give the explanation how 2/3 is the answer of the problem
am. 240.
Chapter 36 Solutions
Principles of Economics (12th Edition)
Knowledge Booster
Similar questions
- Calculate the missing values in the table below given that the Aggregate Consumption Function for a country is equal toC= 150 + 0.75Y and planned investment is fixed at 300. Aggregate Output (Income) (Y) Aggregate Consumption Investment (C) Unplanned Inventory Change (Y-AE) Planned Planned Aggregate Expenditure (AE) Equilibrium? (1) 1,500 300 1,800 300 2,100 300 2,400 300 2,700 300 What is likely to happen to aggregate output if the economy produces above the equilibrium level? How much is aggregate saving at the equilibrium level? Calculate the multiplier. Calculate the new equilibrium if Planned Investment increased by $50M.arrow_forwardConsider an economy that is characterized by the following equations: C= 400 + 0.5 Yd I = 700 - 4000i + 0.1y G= 200 T= 200 (M/P)d - = 0.75Y - 7500€ (MP)== 600 What is the equilibrium consumption (C)?arrow_forwardConsider an economy that is characterized by the following equations: C= 400 + 0.5 Yd I = 700 - 4000i + 0.1Y G= 200 T= 200 (MP)d = 0.75Y - 7500; (M/P)S = 600 What is the equilibrium investment (I)?arrow_forward
- Please show solution.arrow_forwardAssuming society’s mpc is constant so an aggregate of income of $3000 aggregate consumption would bearrow_forwardDI (1) $0 10 с 20 30 401 50 DI (2) с DI (3) $4 $0 $65 11 80 125 18 160 185 25 240 245 32 320 305 80 74 39 400 365 100 92 (Advanced analysis) Refer to the given consumption schedules. DI signifies disposable income and C represents consumption expenditures. All figures are in billions of dollars. When plotted on a graph, the vertical intercept of the consumption schedule in economy (3) is ______and the slope is O $2; 0.18 O minus $2; 0.9 O $100; 0.5 O $2; 0.9 C $0 20 40 60 $2 20 38 56arrow_forward
- You are an economic advisor to the government. Discuss your opinion . a) How COVID-19 pandemic will affect the consumption behavior as well as the investment done by the firms and household for the next two years? b) What are the actions or policies that the government can implement to face this situation? please answers with analysis and --graph (if possible)arrow_forwardRefer to the below figure: the saving function can be given as: Aggregate consumption (C) 270 200 130 60 450 100 S = -60 -0.3Y O S = -60+ 0.3Y O S = 60+ 0.7Y O S = -60 -0.7Y O S = -60 +0.7Y 200 300 Aggregate income (Y)arrow_forwardD7arrow_forward
- Refer to the information provided in Table 8.8 below to answer the questions that follow. Table 8.8 Aggregate Output Aggregate Consumption Planned Investment ($ million) 3,000 ($ million) ($ million) 1,600 1,600 1,600 1,600 2,000 4,000 2,800 3,600 4,400 5,200 5,000 6,000 7,000 1,600 Refer to Table 8.8 Which of the following statements is false? Select one: a. The MPC for this economy is 0.8. b. If aggregate output equals $4000 million, then aggregate saving equals $1000 million. c. At an output level of $3.000 million, there is a $600 million unplanned inventory decrease. O d. At an output level $4,00o million, there is a $400 million unplanned inventory decreasearrow_forwardQI) Using the following data calculate the value of multipliers under 1) Private Closed Economy (PCE) 2) Private Open Economy (POE) 3) Mixed Open Economy (MOE) Why are they different? C = 200 + 0.95Y4 Ca = 200 + 0.95Y4 | = 70 X = 50 M = 50 – 0.1Y T = 20 – 0.2Yarrow_forwardPlease round to 2 decimal placesarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you