Homework Answers
a.
b.
The equilibrium level of GDP condition
GDP=C+Ip
Equilibrium level of GDP=$2,000
c.
The equilibrium level of GDP condition
GDP=C+New Ip
Equilibrium level of GDP=$2,500
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Economics 121 Practice Problem 1. Assume the aggregate expenditures model with the following values C =...
Income (Y) Consumption (C) Investment Expenditures (I) Government Expenditures (G) Net Export Expenditures (NX) Aggregate Expenditures...
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 d.) If the government wants to increase the same amount of increased in equilibrium level of income through tax cuts, the government should decrease taxes by how much...
Income (Y) Consumption (C) Investment Expenditures (I) Government Expenditures (G) Net Export Expenditures (NX) Aggregate Expenditures...
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?
Income (Y) Consumption (C) Investment Expenditures (I) Government Expenditures (G) Net Export Expenditures (NX) Aggregate Expenditures...
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 b.) Show the equilibrium income with the help of graph by taking income demand on the horizontal axis and AE on the vertical axis.
1. Consider an economy where aggregate expenditures can be characterized by the following information: household consumption...
1. Consider an economy where aggregate expenditures can be characterized by the following information: household consumption C = 100+ 0.8Yd, investment expenditure 1 = 100, government expenditure G = 300, exports X = 300 and imports IM = 0.14Y. Suppose that the income tax rate is 20%, and that the government has no initial debt, so that D = 0. (a) Solve for the AE function and the equilibrium level of national output Y. (b) Solve for the government's budget...
What is the equilibrium level of income in this Keynesian model? When DI (AP) = 1000,...
What is the equilibrium level of income in this Keynesian model? When DI (AP) = 1000, C=1200, Ip=300, G=200, Exports=100, Imports=50 When DI (AP) = 2000, C=2000, Ip=300, G=200, Exports=100, Imports=100 When DI (AP) = 3000, C=2800, Ip=300, G=200, Exports=100, Imports=150 When DI (AP) = 4000, C=3600, Ip=300, G=200, Exports=100, Imports=200 When DI (AP) = 5000, C=4000, Ip=300, G=200, Exports=100, Imports=250
Question 16 1 pts In the aggregate expenditures model of the economy, a downward shift in...
Question 16 1 pts In the aggregate expenditures model of the economy, a downward shift in aggregate expenditures can be caused by a decrease in government spending or an increase in taxes. taxes or an increase in government spending. interest rates or a decrease in taxes. saving or an increase in government spending Question 18 As disposable income decreases, consumption and saving both increase. and saving both decrease. increases and saving decreases. decreases and saving increases. Question 19 1 pts...
instant Virtual Extra iz #2 (Business Cycles, Un.& Infl., Aggregate Exp. Model & Aggregate De... Saved...
instant Virtual Extra iz #2 (Business Cycles, Un.& Infl., Aggregate Exp. Model & Aggregate De... Saved 13 The graph below shows the consumption schedule for Zamunda. Research has yielded the following information about Zamunda: At the current interest rate, gross investment (1) is $500. government purchases (G) are $800, exports are $400, and imports are $200. Instructions: In part a, enter your answer as a whole number. In part cround your answers to 1 decimal place. a. By supplementing the...
Assume the following macroeconomic variable in $ billion) for an economy: Y-national income - Aggregate Expenditures...
Assume the following macroeconomic variable in $ billion) for an economy: Y-national income - Aggregate Expenditures Aggregate Expenditures Consumption + Investment + Government Spending + Net Export Assuming that the full employment level in $6,000 billion, determine the change in government spending needed to reach full employment. (Hint: calculate the current GDP then calculate aggregate expenditures using national income of $6,000 and find the difference) Consumption (80% of disposable or after tax income) + $300 C = $300 +0.8 (Y-T)...
These equations represent the AE model of Country X and correspond with Question #3 C =...
These equations represent the AE model of Country X and correspond with Question #3 C = 0.75(DI) + 3000 I = 3000 G = 2000 X = 2000 M = 1000 T = 4000 DI = Y – T C = consumption expenditure, DI = disposable income I = autonomous investment G = government expenditure X = exports M = imports T = tax revenues Y = real GDP 3. What is the equilibrium real GDP (Y*) in this economy?...
Please help with this economics FRQ!! Thanks! PRACTICE FRQ 2: The AS/AD Model Assume the economy...
Please help with this economics FRQ!! Thanks!
PRACTICE FRQ 2: The AS/AD Model Assume the economy of Hammonton is currently in a recession in a short run equilibrium 1. Draw a correctly labeled graph of short-run aggregate supply, long-run aggregate supply and aggregate demand. 2. Show each of the following: ar Snip 1. The long-run equilibrium output, labeled Yf The current equilibrium output and price levels, labeled Ye and PLe, respectively 2. 3. Assume there is an increase in exports...
1. Consider an economy where aggregate expenditures can be characterized by the following information: household consumption C = 100+ 0.8Yd, investment expenditure 1 = 100, government expenditure G = 300, exports X = 300 and imports IM = 0.14Y. Suppose that the income tax rate is 20%, and that the government has no initial debt, so that D = 0. (a) Solve for the AE function and the equilibrium level of national output Y. (b) Solve for the government's budget...
Question 16 1 pts In the aggregate expenditures model of the economy, a downward shift in aggregate expenditures can be caused by a decrease in government spending or an increase in taxes. taxes or an increase in government spending. interest rates or a decrease in taxes. saving or an increase in government spending Question 18 As disposable income decreases, consumption and saving both increase. and saving both decrease. increases and saving decreases. decreases and saving increases. Question 19 1 pts...
instant Virtual Extra iz #2 (Business Cycles, Un.& Infl., Aggregate Exp. Model & Aggregate De... Saved 13 The graph below shows the consumption schedule for Zamunda. Research has yielded the following information about Zamunda: At the current interest rate, gross investment (1) is $500. government purchases (G) are $800, exports are $400, and imports are $200. Instructions: In part a, enter your answer as a whole number. In part cround your answers to 1 decimal place. a. By supplementing the...
Assume the following macroeconomic variable in $ billion) for an economy: Y-national income - Aggregate Expenditures Aggregate Expenditures Consumption + Investment + Government Spending + Net Export Assuming that the full employment level in $6,000 billion, determine the change in government spending needed to reach full employment. (Hint: calculate the current GDP then calculate aggregate expenditures using national income of $6,000 and find the difference) Consumption (80% of disposable or after tax income) + $300 C = $300 +0.8 (Y-T)...
Please help with this economics FRQ!! Thanks!
PRACTICE FRQ 2: The AS/AD Model Assume the economy of Hammonton is currently in a recession in a short run equilibrium 1. Draw a correctly labeled graph of short-run aggregate supply, long-run aggregate supply and aggregate demand. 2. Show each of the following: ar Snip 1. The long-run equilibrium output, labeled Yf The current equilibrium output and price levels, labeled Ye and PLe, respectively 2. 3. Assume there is an increase in exports...
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