e) To reach the target Y, the change in G should be
∆Y/∆G = 5
∆G = ∆Y/5
∆G = Yf-Y/5
Where Yf - $9000 and Y - $7500
∆G = 9000-7500/5
= 1500/5
= 300
Thus government need to increase $300 to achieve the target GDP
f) To reach the target Yf, there is need to decrease the tax by the amount
∆T = ∆Y/-4
= Yf -Y/-4
= 9000-7500/-4
= -1500/4
= -375
Thus to reach the target amount of Yf=$9000 from the initial Y = $7500 , there is a need to decrease the tax amount by $375.
help.. 21. Given: C = 400+.8(Yd), initial equilibrium = $7500, the target full-employment equilibrium = $9000....
help with those problema please 19 trhough 23 please 19. a. Complete the table below. All figures are dollar amounts. Assume planned investment - $25 and note that once planned investment is determined, it stays constant (in our model) regardless of the level of GDP. Remember that U.LI. unplanned inventory investment (which is Y - pl AE). Y=GDP pl AE U.I.I pl I 1310 1301 -16 25 1326 1320 1307 25 1330 17 25 1340 1319 21 25 1350 1325...
help... 22. Given the MPC = 75, the initial equilibrium = $20,000, and the target Y= $25,000. a. Calculate the spending multiplier. Calculate the tax multiplier. b. By how much would G have to be increased to reach the target Y? c. By how much would T have to be decreased to reach the target Y? 23. True or False AND explain why: a. If G > T, the government budget is in a deficit. b. A tax cut will...
Assume the following model of the expenditure sector: C = 420 + (4/5)YD T0 = 100 Io = 160 Go = 180 NXo = - 40 1- Calculate the multiplier? 2- Calculate the equilibrium GDP? 3- If the government would like to increase the equilibrium level of output (Y) to the full-employment level Y* = 3,800, by how much should government purchases (G) be changed? 4- Suppose government imposes a progressive tax policy and the new tax represents by: T...
Please properly answer the questions listed below. Also, please (TYPE) everything out. 3- Suppose that the government is running a balanced budget and the value of purchases made by the government is 200. The consumption function is C = 200 + 0.6 Yd and planned investment is 100. b) If the level of aggregate output is 1250, calculate: - Disposal income - Aggregate consumption - Aggregate Saving - Planned aggregate expenditure - Unplanned inventory change Y = C + S...
4. Suppose that an economy is given by the following equations C= 100+ 0.8 (Y-T), 1= 20, G=T=10. The full employment level of output of the economy is Yp=600 1) By how much will the govemment have to change its expenditure to achieve full employment equilibrium? 11) If the government wants to achieve the same target by changing the level of lump sum tax, then by how much will it have to change T? iii) By how much will the...
1-5 We have the following model of the economy: (I)Y-C+S+T (2) E-C+I+G (3) Y E (4) C-(YD. CA (5) S-s(YD SA) (6) I=IA 7) G-GA (8) T TA (9) YD Y T (10) Deficit =G-T The following data for equilibrium values will help in this problem. G-800 I 30 T=650 Y'=5,000 Calculate 1. the equilibrium value of consumption 2. marginal propensity to consume (AC/AY) 3. the expenditure multiplier 4. The government budget now has an imbalance ofThis is a DEFICIT...
A5-10. Suppose the following aggregate expenditure model describes an economy: C = 100 + (5/6)Yd T = (1/5)Y 1 = 200 G = 400 X = 300 IM = (1/3)Y where C is consumption, Yd is disposable income, T is taxes, Y is national income, I is investment, G is government spending, X is exports, and IM is imports. (a) Derive a numerical expression for aggregate expenditure (AE) as a function of Y. Calculate the equilibrium level of national income....
10.) An economy has a marginal propensity to consume and Y* , income-expenditure equilibrium GDP, equals $500 billion. Given an autonomous increase in plannėd investment of $10 billion, show the rounds of increased spending that take place by completing the accompanying table. The first and second rows are filled in for you. In the first row the increase of planned investment spending of $10 billion raises real GDP and YD by $10 billion, leading to an increase in consumer spending...
a. Reynes digu . Question 6 (2 points) If equilibrium output and income (Y) is 1,000 less than potential output at full employment (Y), and the marginal propensity to consume is 0.8, how much additional autonomous spending is needed to reach full employment that is, what is the recessionary gap)? If the government decreased total taxes out of income (T), how much would the tax cut have to be to bring the economy to full employment?
Could you please help me with 1a-c. Pictures below. It would be greatly appreciated. Thankyou so much. 1.a) b) c) Use the information below for a four sector economy, answer the following questions: - 300 +0.75 Yd = = DELUXE 150 400 = Disposable Income GDP Consumption Taxes Investment Exports Imports Full Employment GDP Equilibrium Income 150 2,691 = YT Part 1: What is the value of autonomous expenditures Number Part 2: What is the slope of the aggregate expenditure...