|
Income Or Output Y |
Consumption Expenditure C |
Investment Expenditure I |
Government Expenditure G |
Net export Expenditure NX |
|
$4,000 |
3,925 |
100 |
100 |
25 |
|
4,100 |
4,000 |
100 |
100 |
25 |
|
4,200 |
4,075 |
100 |
100 |
25 |
|
4,300 |
4,150 |
100 |
100 |
25 |
|
4,400 |
4,225 |
100 |
100 |
25 |
|
4,500 |
4,300 |
100 |
100 |
25 |
|
4,600 |
4,375 |
100 |
100 |
25 |
|
4,700 |
4,450 |
100 |
100 |
25 |
|
4,800 |
4,525 |
100 |
100 |
25 |
|
4,900 |
4,600 |
100 |
100 |
25 |
|
5,000 |
4,675 |
100 |
100 |
25 |
c) If government expenditure grows to $150, what will be the new equilibrium level of income?
| Y | C | I | G | NX | AE = C+I+G+NX |
| 4000 | 3925 | 100 | 150 | 25 | 4200 |
| 4100 | 4000 | 100 | 150 | 25 | 4275 |
| 4200 | 4075 | 100 | 150 | 25 | 4350 |
| 4300 | 4150 | 100 | 150 | 25 | 4425 |
| 4400 | 4225 | 100 | 150 | 25 | 4500 |
| 4500 | 4300 | 100 | 150 | 25 | 4575 |
| 4600 | 4375 | 100 | 150 | 25 | 4650 |
| 4700 | 4450 | 100 | 150 | 25 | 4725 |
| 4800 | 4525 | 100 | 150 | 25 | 4800 |
| 4900 | 4600 | 100 | 150 | 25 | 4875 |
| 5000 | 4675 | 100 | 150 | 25 | 4950 |
c) If government expenditure grows to $150, the new equilibrium level of income is $4,800.
Equilibrium occurs where, Y = AE
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G Net export Expenditure NX $4,000 3,925 100 100 25 4,100 4,000 100 100 25 4,200 4,075 100 100 25 4,300 4,150 100 100 25 4,400 4,225 100 100 25 4,500 4,300 100 100 25 4,600 4,375 100 100 25 4,700 4,450 100 100 25 4,800 4,525 100 100 25 4,900 4,600 100 100 25 5,000 4,675 100 100 25 a) Determine equilibrium level...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G Net export Expenditure NX $4,000 3,925 100 100 25 4,100 4,000 100 100 25 4,200 4,075 100 100 25 4,300 4,150 100 100 25 4,400 4,225 100 100 25 4,500 4,300 100 100 25 4,600 4,375 100 100 25 4,700 4,450 100 100 25 4,800 4,525 100 100 25 4,900 4,600 100 100 25 5,000 4,675 100 100 25 b) Calculate expenditure multiplier
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G Net export Expenditure NX $4,000 3,925 100 100 25 4,100 4,000 100 100 25 4,200 4,075 100 100 25 4,300 4,150 100 100 25 4,400 4,225 100 100 25 4,500 4,300 100 100 25 4,600 4,375 100 100 25 4,700 4,450 100 100 25 4,800 4,525 100 100 25 4,900 4,600 100 100 25 5,000 4,675 100 100 25 2. Calculate MPC, MPS...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G Net export Expenditure NX $4,000 3,925 100 100 25 4,100 4,000 100 100 25 4,200 4,075 100 100 25 4,300 4,150 100 100 25 4,400 4,225 100 100 25 4,500 4,300 100 100 25 4,600 4,375 100 100 25 4,700 4,450 100 100 25 4,800 4,525 100 100 25 4,900 4,600 100 100 25 5,000 4,675 100 100 25 e) Suppose a tax...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G Net export Expenditure NX $4,000 3,925 100 100 25 4,100 4,000 100 100 25 4,200 4,075 100 100 25 4,300 4,150 100 100 25 4,400 4,225 100 100 25 4,500 4,300 100 100 25 4,600 4,375 100 100 25 4,700 4,450 100 100 25 4,800 4,525 100 100 25 4,900 4,600 100 100 25 5,000 4,675 100 100 25 3. Calculate GDP loss...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G Net export Expenditure NX $4,000 3,925 100 100 25 4,100 4,000 100 100 25 4,200 4,075 100 100 25 4,300 4,150 100 100 25 4,400 4,225 100 100 25 4,500 4,300 100 100 25 4,600 4,375 100 100 25 4,700 4,450 100 100 25 4,800 4,525 100 100 25 4,900 4,600 100 100 25 5,000 4,675 100 100 25 3. Calculate GDP loss...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G Net export Expenditure NX $4,000 3,925 100 100 25 4,100 4,000 100 100 25 4,200 4,075 100 100 25 4,300 4,150 100 100 25 4,400 4,225 100 100 25 4,500 4,300 100 100 25 4,600 4,375 100 100 25 4,700 4,450 100 100 25 4,800 4,525 100 100 25 4,900 4,600 100 100 25 5,000 4,675 100 100 25 3. Calculate GDP loss...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G Net export Expenditure NX $4,000 3,925 100 100 25 4,100 4,000 100 100 25 4,200 4,075 100 100 25 4,300 4,150 100 100 25 4,400 4,225 100 100 25 4,500 4,300 100 100 25 4,600 4,375 100 100 25 4,700 4,450 100 100 25 4,800 4,525 100 100 25 4,900 4,600 100 100 25 5,000 4,675 100 100 25 a) Determine equilibrium level...
Income (Yd) Consumption Expenditure Saving Investment Expenditure Government Expenditure Net Export Expenditure Aggregate Expenditure $8000 $11,000 $2,500 $5,000 $12,500 12,000 14,000 2,500 5,000 12,500 20,000 20,000 2,500 5,000 12,500 30,000 27,500 2,500 5,000 12,500 50,000 42,500 2,500 5,000 12,500 100,000 80,000 2,500 5,000 12,500 Calculate savings, MPC, MPS, break even income, and the equilibrium level of income (Y = AE = C + I + G +NX) in the above given information. Draw a graph showing disposable income (Yd)...
Income (Y) Consumption (C) Investment Expenditures (I) Government Expenditures (G) Net Export Expenditures (NX) Aggregate Expenditures (AE) $8000 12400 2000 3000 -1000 10000 14000 2000 3000 -1000 14000 17200 2000 3000 -1000 20000 22000 2000 3000 -1000 30000 30000 2000 3000 -1000 50000 46000 2000 3000 -1000 80000 70000 2000 3000 -1000 c.) What would be the new equilibrium income level if the government expenditures were increased to $9,000? What is the increased equilibrium level of income?