Homework Answers
7) Option A is correct. Note that when expenditure is equal to production there should be no inventories.
8) At equilibrium C + I = Y which means 50 + 0.8Y + 100 = Y or Y = 150/0.2 = 750. Select option A
9) Multiplier = 1/(1-0.8) = 5. Select D
10) income = 750 and consumption C = 50 + 0.8*750 = 650. Hence saving is S = 750 – 650 = 100. Select B
11) Select C
12) Select B
Add Answer to:
7. Equilibrium GDP on the demand side occurs when a. total spending equals total production, and...
13. The reason for the multiplier effect is that a. one person's additional expenditure constitutes a...
13. The reason for the multiplier effect is that a. one person's additional expenditure constitutes a new source of income for another person, and this additional income leads to still more spending, and so on. b. changes in government spending typically deepen recessions or exacerbate inflationary conditions in the economy. c. businesses make decisions about investment projects based on anticipated profits. d. additional spending lowers the real interest rate and leads to further borrowing and spending by businesses. 14. If...
If the spending multiplier equals 5 and equilibrium income is $2 billion below potential GDP. then...
If the spending multiplier equals 5 and equilibrium income is $2 billion below potential GDP. then other things being equal, to reach the potential real GDP level. autonomous spending needs to increase by $0.1 billion nominal GDP needs to increase by $1.2 billion autonomous spending needs to decrease by $6 billion nominal GDP needs to decrease by $12 billion autonomous spending needs to increase by $0.4 billion
Spending and production in an economy are described by the following table. Currently the level of...
Spending and production in an economy are described by the following table. Currently the level of Government spending = $0. GDP $500 550 600 650 700 10 Consumption + Investment $525 560 595 630 665 700 Exports Imports $15 $10 15 15 10 15 10 750 15 10 | a. Given the following information, what is the equilibrium level of GDP for this economy? b. What is the value of the multiplier for this economy? C. If the government increases...
Question 7 1 pts The equilibrium level of real GDP is $1,000, the target level of...
Question 7 1 pts The equilibrium level of real GDP is $1,000, the target level of real GDP is $1,250, and the marginal propensity to consume (MPC) is 0.80. The target can be reached if government spending is: increased by $100 billion increased by $50 billion increased by $250 billion. O held constant. Question 8 1 pts The tax multiplier equals 1 spending multiplier True False
1. Complete the table below where the cells are blank. (10 pts) Output Sensor Saving Inxstant...
1. Complete the table below where the cells are blank. (10 pts) Output Sensor Saving Inxstant Export Import ort GDP=DI Net Agg Age Unnind Output Invent Emploxmnt 250 260 310 15 330310 2. What number is unplanned inventories at output of $270 million? Explain what the unplanned inventories number means at that output level? (2 pts) 3. At $330 million of output what must happen in this open economy to reach equilibrium? (2 pts) 4. Equilibrium is achieved at what...
1. In a closed economy to have sustainable output, Aggregate Expenditures are equal to
1. In a closed economy to have sustainable output, Aggregate Expenditures are equal toa. Consumptionb. Consumption + Investmentc. Consumption + Investment + Govemmentd. Consumption + Investment + Net Exports2. The calculation 1 /(1-MPC) equalsa. Marginal Propensity to Saveb. Multiplierc. Aggregate Expenditured. Average Consumption3. In a closed economy, when Aggregate Expenditures equal GDP.a. Consumption equals investmentb. Consumption equals aggregate expenditurec. Saving = Planned Investmentd. Disposable income equals consumption minus saving4. Net exports are calculated asa. Importsb. Imports - Exportsc. Exports -...
10.) An economy has a marginal propensity to consume and Y* , income-expenditure equilibrium GDP,...
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...
An economy has no government sector and no international trade. One year, desired investment spending equals $481 billi...
An economy has no government sector and no international trade. One year, desired investment spending equals $481 billion, consumption spending in this economy equals $623 billion, and total output equals $1,401 billion. 4.1 Is this economy in equilibrium? Explain why or why not. 4.2 What is the unplanned increase in inventories in this economy? 4.3 What is total investment in this economy?
Response Questions Part A To C Assume the simple spending multiplier equals 10. Determine the size...
Response Questions Part A To C Assume the simple spending multiplier equals 10. Determine the size and direction of any changes of the aggregate expenditure line, real GDP demanded, and the aggregate demand curve for each of the following: A) Spending rises by $8 billion at each spending level B) Spending falls by $5 billion at each income level C) Spending rises by $20 billion at each income level
9. Refer to the below table. For the open economy, the equilibrium GDP is domestic output...
9. Refer to the below table. For the open economy, the equilibrium GDP is domestic output AE, closed economy exports imports 200 230 30 20 250 270 30 20 300 310 30 20 350 350 30 20 400 390 30 20 450 430 30 20 500 470 30 20 A) $300 B) $350 C) $400 D) $450 10. If net exports decline from zero to some negative amount, the aggregate expenditures schedule would A) shift upward B) shift downward C)...
13. The reason for the multiplier effect is that a. one person's additional expenditure constitutes a new source of income for another person, and this additional income leads to still more spending, and so on. b. changes in government spending typically deepen recessions or exacerbate inflationary conditions in the economy. c. businesses make decisions about investment projects based on anticipated profits. d. additional spending lowers the real interest rate and leads to further borrowing and spending by businesses. 14. If...
If the spending multiplier equals 5 and equilibrium income is $2 billion below potential GDP. then other things being equal, to reach the potential real GDP level. autonomous spending needs to increase by $0.1 billion nominal GDP needs to increase by $1.2 billion autonomous spending needs to decrease by $6 billion nominal GDP needs to decrease by $12 billion autonomous spending needs to increase by $0.4 billion
Spending and production in an economy are described by the following table. Currently the level of Government spending = $0. GDP $500 550 600 650 700 10 Consumption + Investment $525 560 595 630 665 700 Exports Imports $15 $10 15 15 10 15 10 750 15 10 | a. Given the following information, what is the equilibrium level of GDP for this economy? b. What is the value of the multiplier for this economy? C. If the government increases...
Question 7 1 pts The equilibrium level of real GDP is $1,000, the target level of real GDP is $1,250, and the marginal propensity to consume (MPC) is 0.80. The target can be reached if government spending is: increased by $100 billion increased by $50 billion increased by $250 billion. O held constant. Question 8 1 pts The tax multiplier equals 1 spending multiplier True False
1. Complete the table below where the cells are blank. (10 pts) Output Sensor Saving Inxstant Export Import ort GDP=DI Net Agg Age Unnind Output Invent Emploxmnt 250 260 310 15 330310 2. What number is unplanned inventories at output of $270 million? Explain what the unplanned inventories number means at that output level? (2 pts) 3. At $330 million of output what must happen in this open economy to reach equilibrium? (2 pts) 4. Equilibrium is achieved at what...
1. In a closed economy to have sustainable output, Aggregate Expenditures are equal toa. Consumptionb. Consumption + Investmentc. Consumption + Investment + Govemmentd. Consumption + Investment + Net Exports2. The calculation 1 /(1-MPC) equalsa. Marginal Propensity to Saveb. Multiplierc. Aggregate Expenditured. Average Consumption3. In a closed economy, when Aggregate Expenditures equal GDP.a. Consumption equals investmentb. Consumption equals aggregate expenditurec. Saving = Planned Investmentd. Disposable income equals consumption minus saving4. Net exports are calculated asa. Importsb. Imports - Exportsc. Exports -...
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...
Response Questions Part A To C Assume the simple spending multiplier equals 10. Determine the size and direction of any changes of the aggregate expenditure line, real GDP demanded, and the aggregate demand curve for each of the following: A) Spending rises by $8 billion at each spending level B) Spending falls by $5 billion at each income level C) Spending rises by $20 billion at each income level
Most questions answered within 3 hours.
-
20% of all customers subscribe to phone service.
70% of all customers subscribe to internet service....
asked 1 minute ago -
Write a program to solve the Josephus problem, with the following
modification:
Sample Input:
./a.out n...
asked 2 hours ago -
At the start of a CD it is spinning at a rate of 525 rpm
(revolutions...
asked 3 hours ago -
4. Without doing any calculations, predict whether the observed
∆T would increase, decrease or remain the...
asked 4 hours ago -
Based on the range, which of the following sets of scores has
the greatest variability? 3,...
asked 5 hours ago -
Ripples in a pond travel at a velocity of 3 m/s with one peak
passing a...
asked 5 hours ago -
A man stands on the roof of a building of height 13.0 mm and
throws a...
asked 5 hours ago -
The extent to which assets are financed by borrowed funds and
other liabilities is indicated by:...
asked 6 hours ago -
Explain in detail
Germany is the fifth largest economy
explain what goods and services Germany specializes...
asked 6 hours ago -
The density of platinum is 21.45 g/mL. If a cube of platinum
with a mass of...
asked 6 hours ago -
Accounts Receivable
Sales
A/R Posting
Extended Sales Invoice
Packing Slip
Compare invoice to packing slip 2...
asked 7 hours ago -
Michaella, age 23, is a full-time law student and is claimed by
her parents as a...
asked 7 hours ago