At equilibrium AE=Y
.75Y+800=Y
.25Y=800
Y=3,200
Thus, equilibrium level of GDP:
Y*=3,200
Suppose the equation of an economy's Aggregate Planned Expenditure function is AE = 75y + 800....
QUESTION 18 Suppose the equation of an economy's Aggregate Planned Expenditure function is AE - 75y + 800. What is the value of the equilibrium level of real GDP (denoted Y*)? Y* = [X] QUESTION 19 Suppose the equation of an economy's Aggregate Planned Expenditure function is AE - 75y + 800. If real GDP - $1000, unplanned inventory investment will be $. so firms will have incentive to output next period.
Potential GDP 1,000 AE AE. 800 700 600 ΔΑΕ Aggregate Expenditure (dollars) 400 200 AY 45° 0 0 200 400 600 700 800 1,000 Real GDP (billions of constant dollars) 11. Given the following Consumption Function as C = 350 +0.75 (Y); and actual equilibrium real GDP as $700; and full-employment real GDP as $800. The amount of government spending necessary to close up such GDP gap is: $20 $32.50 $30 $25 $27.50
Potential GDP 1,000 AE, AE 800 700 600 - AAE Aggregate Expenditure (dollars) 400 200 AY 45° 0 0 200 400 600 700 800 1,000 Real GDP (billions of constant dollars) 16. Given the following Consumption Function as C = 350 +0.75 (Y); and actual equilibrium real GDP as $700; and full-employment real GDP as $800. The amount of taxes that need to be cut to close up such GDP gap is: $33.33 -$35.33 -$30.33 cannot be computed based on...
At point a in the graph to the right, planned aggregate
expenditure is
At point A in the graph to the right planned aggregate expenditure is GDP. At point B, planned aggregate expenditure is GDP. At point, planned aggregate expenditure is GDP. At point A, the unintended change in inventories can be shown on the graph by: Real aggregate expenditure, AE O A. the horizontal distance between point A and point B. OB. the vertical distance between point A and...
14000 Aggregate Expenditures when P= 100 12000 10000 8000 Planned Aggregate Expenditure (AE) - 6000 -- 4000 - - 2000 07 O 2000 4000 6000 8000 10000 12000 14000 Real GDP (Y) Aggregate Demand 140 Price Level 120 0 2000 4000 6000 8000 1000012000140001600018000 In the figures above, if autonomous spending rises for any reason other than a decrease in the price level, then: The Aggregate Expenditure curve will shift down and there will be a downward movement along the...
1. Suppose below diagram illustrates the aggregate expenditure function of an economy. a. What is the value of the equilibrium output in this economy? b. What is the value of the MPC according to the aggregate expenditure function? c. What is the value of the multiplier? d. What is the unplanned change in inventory when the real GDP is $15 billion? e. Suppose the economy is producing the macroeconomic equilibrium output level. If there is an increase in autonomous expenditure...
Figure: Aggregate Expenditures Curve III 3. Aggregate expenditures (per year) 45-degree line AE $800 $3.200 Real GDP (per year) . (Figure: Aggregate Expenditures Curve IlI) According to the figure Aggregate Expenditures Curve III, suppose that the economy is at the equilibrium real GDP of $3,200. Suppose that the consumption function in this figure rises by $100. What will the new equilibrium real GDP be? Show your work.
Figure: Aggregate Expenditures Curve III 3. Aggregate expenditures (per year) 45-degree line AE...
Question#1A The following are details of the expenditure of a very small economy. All the autonomous expenditures are given in $ thousand. C = 200 + 0.8Yd I = 10 G = 50 T = 0.05Y X = 40 M = 0.1Y Derive the aggregate expenditure function, and calculate the equilibrium real GDP Determine the expenditure multiplier using aggregate expenditure function slope value Question#1B Suppose the slope of the AE curve is 0.80. i) What is the expenditure multiplier? ii) Everything else the same, by how much does equilibrium aggregate expenditure...
$10,0001 $8,000 Aggregate expenditure $6,000 Aggregate Expenditure $4,000 $2,000 $0 $0 $2,000 $4,000 $6,000 $8,000 $10,000 Real GDP (Y) 1. The premise of the Keynesian aggregate expenditure model is that the amount of goods and services produced, and therefore the level of employment, depends directly on the level of total expenditures Refer to the above graph and answer the following questions: a. For the GDP level of $5000, GDP (output from producers) is less than real domestic output desired by...
provide an explanation with a steps of the answer for each
question please
1,600 Planned aggregate expenditure, AE (billions of dollars) OS 1,600 Aggregate output, Y billions of dollars) Figure 24.5 1) Refer to Figure 24.5. If the economy is in equilibrium and the government decreases spending by $200 billion, equilibrium aggregate output decreases to S billion. A) 1,400 B) 1,200 C) 1,000 D) 800 2) Refer to Figure 24.5. If the economy is in equilibrium and the government increases...