ZuoTi.Pro
Question

2. An economy is described by the following equations C 40 + 0.8(Y-7) P 70 G- 120 T 150 The multiplier in this economy is 5.(LO4. LO5) a Find a numerical equation relating planned aggregate expenditure to output b Construct a table to find the value of short-run equilibrium output. (Hint: The economy is fairly close to full employment) c By how much would government purchases have to change in order to eliminate any output gap? By how much would taxes have to change? Show the effects of these fiscal policy changes in a Keynesian-cross diagram d Repeat part c assuming that Y -630 e. Show your results for parts b through d on a Keynesian-cross diagram
business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Request Professional Answer

Request Answer!

We need at least 10 more requests to produce the answer.

0 / 10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)

All students who have requested the answer will be notified once they are available.
Know the answer?
Add Answer to:
2. An economy is described by the following equations C 40 + 0.8(Y-7) P 70 G-...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Similar Homework Help Questions

  • An economy is described as follows: C = 400 + 0.6(Y – T) I p =...

    An economy is described as follows: C = 400 + 0.6(Y – T) I p = 200 G = 200 NX = 60 T = 100 Y* = 2,100 a. For the economy described above, find autonomous expenditure, the multiplier, short-run equilibrium output, and the output gap. Instructions:  Enter your responses as absolute values. Autonomous expenditure:    Multiplier:    Short-run equilibrium output:    There is  (Click to select)  a recessionary  an expansionary  no  output gap in the amount of  . b.  Illustrate this economy’s short-run equilibrium on a...

  • Question 2 (5 pts) An Economy is described by the following equations C-2600+0.8(Y-T)- 10000r I-2000-10000r G-1800...

    Question 2 (5 pts) An Economy is described by the following equations C-2600+0.8(Y-T)- 10000r I-2000-10000r G-1800 Net exports are zero, net taxes T are fixed at 3000, and the real interest rate r, expressed as a decimal is 0.10 (that is, 10 percent). Find a numerical equation relating planned aggregate expenditure to output. Using a table or other method, solve for short-run equilibrium output. Show your result graphically using the Keynesian cross diagram

  • U ponunt 0 Consume 3. An economy is described by the following equations: (LO2) C =...

    U ponunt 0 Consume 3. An economy is described by the following equations: (LO2) C = 1,800 + 0.6(Y - T) P = 900 G = 1,500 NX = 100 T = 1,500 Y* = 9,000 crical equation linking planned aggregate expenditure to output. onomous expenditure and induced expenditure in this economy. a. Find a numerical equation linking plan b. Find autonomous expenditure a or the economy described in Problem 3: (L03) a. Construct a table like Table 11.1 to...

  • i just need the graph An economy is described as follows: C = 3,000 + 0.5...

    i just need the graph An economy is described as follows: C = 3,000 + 0.5 (Y – T) I p = 1,500 G = 2,500 NX = 200 T = 2,000 Y* = 12,000 a. For the economy described above, find autonomous expenditure, the multiplier, short-run equilibrium output, and the output gap. Instructions: Enter your responses as whole numbers. Autonomous expenditure: Multiplier: Short-run equilibrium output: Output gap: b.  Illustrate this economy’s short-run equilibrium on a Keynesian cross diagram. Instructions: On...

  • . Consider an economy described by the following equations. Ip = 700 X = 100 T = 1500 Y* = 10000 Cd = 1800 + 0.6(Y-T) G...

    . Consider an economy described by the following equations. Ip = 700 X = 100 T = 1500 Y* = 10000 Cd = 1800 + 0.6(Y-T) G = 1500 M = 0 u* = 4 where Cd is consumption on domestically produced goods, G is government expenditure, M is imports, u* is the natural rate of unemployment, P is planned investment spending, X is exports, T is tax revenue and Pis potential output. Derive the equation for planned aggregate expenditure...

  • An economy is described by the following equation Cd=14400+0.5(Y-T)-40000r, Ip=8000-20000r, G=7800, NX=1800, T=8000 a) Find the...

    An economy is described by the following equation Cd=14400+0.5(Y-T)-40000r, Ip=8000-20000r, G=7800, NX=1800, T=8000 a) Find the numerical equation relating planned aggregate expenditure (PAE) to output (Y) and to real interest rate (r). b) The real interest rate is 0.133, find short-run equilibrium output. c) Potential output, y*, equals 40,000. What real interest rate should be Reserve Bank set to bring the economy to full employment?

  • For the following economy, find autonomous expenditure, the multiplier, short-run equilibrium output, and the output gap....

    For the following economy, find autonomous expenditure, the multiplier, short-run equilibrium output, and the output gap. By how much would autonomous expenditure have to change to eliminate the output gap? C = 2,000 + 0.9 (Y – T ) I p = 2,000 G = 2,500 NX = 200 T = 2,000 Y* = 48,000 Instruction: Enter your responses as integer values. (please show how to do it if possible thank you) Autonomous expenditure: ___ . Multiplier:__ . Short-run equilibrium...

  • Refer to the accompanying table in answering the questions that follow: Aggregate Expenditures (Catlg+Xn+G), Billions 420...

    Refer to the accompanying table in answering the questions that follow: Aggregate Expenditures (Catlg+Xn+G), Billions 420 Real Domestic Output, Possible Levels of Employment, Millions 70 90 110 130 150 Billions 400 450 460 500 540 580 600 a. If full employment in this economy is 150 million, will there be an inflationary expenditure gap or a recessionary expenditure gap? (Click to select) What will be the consequence of this gap? (Click to select) By how much would aggregate expenditures in...

  • An economy is described by the following equations: Y = C + I + G C...

    An economy is described by the following equations: Y = C + I + G C = 0.75 YD + 20 T = 0.2 Y + 4 G = 20 I = 25 Calculate equilibrium output and equilibrium private and public saving. With how much does equilibrium output falls, if government reduces government expenditure with 1 unit? Explain the event in b) for the multiplier diagram

  • 1. Suppose you are given the following information about Japan's economy: C = 150 + 0.8(Y-T)...

    1. Suppose you are given the following information about Japan's economy: C = 150 + 0.8(Y-T) T = 0 Iplanned = 300 NX = 50 G = 200 a) Set up the aggregate planned expenditure function for Japan. (Write down the equation). b) Graph the aggregate expenditure function, using the diagram below. Be sure to label you graph. Carefully indicate the intercept. What is the slope of the line? c) Calculate equilibrium Real GDP (Y). d) Indicate the equilibrium on...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT