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1. Use this information to answer the questions that follow. (Amounts are in billions of dollars). Indirect Business Taxes$919.0Corporate profits$1208.9Corporate profits taxes$469.4Retained earnings$330.8Proprietors' income$1038.4Rental Income$62.1Net Interest$1171.1Exports$1685.7Net National Product12380.8Imports$2380.4Income Receipts from rest of world$855.6Income Payments to rest the world$754.9Government expenditures for Goods and Services$2716.5Personal Consumption expenditures$9785.7Gross Private Domestic Investment$2162.9Statistical Discrepancy75(i) Find GDP:(a) By...
Suppose that households’ wealth substantially increases. a. Using the labor market diagram, show the effects of this change on demand for and supply of labor. Explain what happens to the equilibrium labor input and real wage rate. b. Using the capital market diagram (which shows the desired capital stock), show the effects of the change in wealth on MPK (demand for capital) and the user cost of capital (supply of capital).
macroeconomics*9. Suppose that autonomous consumption and planned investment in the economy described in problem 5 change to and . All other aspects of the structure of the commodity and the money markets are as described in problem 5.(a) Derive the equation for the new IS curve and verify that the equilibrium interest rate and real output are the same as you computed in parts 5g and 5h, respectively. (b) Calculate the slope of the new IS curve, (c) Compared to problem 5, have autonomous consumption...
ch4.p3 - macroeconomicsThe money and commodity markets are as described in problems 1 and 2 and the real money supply equals $2,750, so that the economy’s equilibrium is initially the same as in part d of problem 2.(a) During the Congressional election of 2010, Party A proposes to increase government spending on roads and bridges by $120 billion and to pay for that spending by raising taxes by that amount. If Party A’s proposal were to be enacted, derive what the...
*7. Using the information given in problem 5, compute by how much the Fed must increase the money supply if it wants to avoid the crowding out of the expansionary fiscal policy described in part a of problem 6. What will be the new value of real GDP?
*9. Suppose that autonomous consumption and planned investment in the economy described in problem 5 change to and . All other aspects of the structure of the commodity and the money markets are as described in problem 5.(a) Derive the equation for the new IS curve and verify that the equilibrium interest rate and real output are the same as you computed in parts 5g and 5h, respectively. (b) Calculate the slope of the new IS curve, (c) Compared to problem 5,...
Compute for the average propensity to consume and to save, and compute for the marginal propensity to consume and to save. - Also the new levels of average propensity to consume and to save after the change. Assuming that \(Y\) or \(Y d=P 1250\) and \(C=P 1000,\) compute for APC \(\&\) APS and interpret each. Disposable income increased by \(\mathrm{P} 525\) which caused consumption spending to increase by \(\mathrm{P} 330\), compute the MPC \& MPS, and the new levels of APC \& APS after the...
Consider the two countries A and B above, but modify the model along the lines of Mankiw, Romer and Weil (1992) so that human capital, H, is included as a factor input. For simplicity, labour efficiency is assumed to be 1 in both countries. Output in country i is thus given by Yit=Kαit Hβit Li(1−α−β) and capital is accumulated according to ∆Kit+1= sikYit−δKit∆Hit+1=shYit−δHit where we note that sh is the same in both countries. a. Let y ≡ Y/L denote GDP per worker. Derive an...
Gross Private Domestic Investment$46Exports of the U.S.9Disposable Income190Personal Saving10Government Purchases84Net Foreign Factor Income10Consumption of Fixed Capital52Dividends13Imports of the U.S.12Taxes on Production and Imports22Personal Taxes38Social Security Contributions23Statistical Discrepancy0 Refer to the accompanying data. All figures are in billions of dollars. Personal income isMultiple Choice$184.$221.$149.$228.
Personal Taxes$23Net Private Domestic Investment33Net Exports6National Income278U.S. Exports20Gross Private Domestic Investment56Disposable Income220Taxes on Production and Imports32Undistributed Corporate Profits15Proprietors' Income45Net Foreign Factor Income0Statistical Discrepancy0 Refer to the accompanying national income data. All figures are in billions of dollars. Consumption of fixed capital (private sector) is