Homework Answers
Solution: decrease, decrease
Explanation: An increase in saving behaviour by people leads to a
decrease in aggregate demand and thus a fall in gross output which
will in turn decrease savings
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Assuming a simple frugal economy with no imports and exports, if planned investment is positively related...
First blank: Imports, exports, saving, or taxes? Select all that apply Second Blank: Always, when savings...
First blank: Imports, exports, saving, or
taxes?
Select all that apply
Second Blank: Always, when savings equals planned
investment, when real GDP is equal to aggregate expenditure, or
when exports are equal to imports?
2. Leakages and injections Aa Aa E increases total injections into the Suppose the economy is initially in equilibrium, when an increase in economy. Which of the following will occur as a result of this change? I GDP rises above planned spending. O Firms experience an...
The Republic of Yuck is a simple economy with no government, no taxes, and no imports...
The Republic of Yuck is a simple economy with no government, no taxes, and no imports and exports. Yuckers (citizens of Yuck) are creatures of habit. They have a rule that everyone saves exactly 21 percent of income. Assume that planned investment is fixed and remains at 65 billion Yuck dollars. Expert economists of the Republic of Yuck have estimated the following: Real GDP (Y): Planned Investment Spending (I): 65 billion Yuck dollars 190 billion Yuck dollars You are asked...
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 -...
Problem 25-09 (algo) An economy with zero net exports is described below: C = 30 +...
Problem 25-09 (algo) An economy with zero net exports is described below: C = 30 + 0.9 (Y-T) P = 100 G = 150 NX = 0 T = 180 The multiplier in this economy is 10. a. Find short-run equilibrium output. Instructions: Enter your responses as whole numbers. Short-run equilibrium output: b. Economic recovery abroad increases the demand for the country's exports; as a result, NX rises to 25. Short-run equilibrium output (Click to select) to . C. Assume...
QUESTION 3 Tribons of dolers GDP Consumption Government spending Exports Imports Budget balance Given the values...
QUESTION 3 Tribons of dolers GDP Consumption Government spending Exports Imports Budget balance Given the values in the table, and assuming transfer payments trillion (Round to one decimal place.) , compute the value of private saving. Private saving QUESTION 4 Trons GDP Consumption Government pending Exports Imports Budget balance What is the value of national savings for the hypothetical economy whose data is given in the table? National Savings trillion.(Round to one decimal place.) 5 QUESTION 5 Tribons of dollars...
An economy has no imports and no taxes, the MPC is 0.8, and real GDP is...
An economy has no imports and no taxes, the MPC is 0.8, and real GDP is $250 billion. Businesses decrease investment by $5 billion. Calculate the new level of real GDP. Explain why real GDP decreases by more than $5 billion. The new level of real GDP is $ billion. Real GDP decreases by more than $5 billion because the decrease in investment_ 0 A. induces an increase in saving O B. decreases the marginal propensity to consume O C....
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...
Consumption: ?? = 4 + 0.5(? − ?) Investment: ?? = 4 + 0.2? Government expenditure:...
Consumption: ?? = 4 + 0.5(? − ?) Investment: ?? = 4 + 0.2? Government expenditure: ? = 30 Tax revenue: T = 0.2? Exports: ? = 7 Imports: ? = 0.02 ? where Cd is consumption on domestically produced goods (remember: total consumption, C=Cd +M), Y is domestic output, G is government expenditure, M is imports, IP is planned investment spending, X is exports, and T is tax revenue. (i) Derive the equation for planned aggregate expenditure (PAE) on...
An economy is initially at full employment, but a decrease in planned investment spending (a comp...
An economy is initially at full employment, but a decrease in planned investment spending (a component of autonomous expenditure) pushes the economy into recession. Assume that the marginal propensity to consume (mpc) of this economy is 0.75 and that the multiplier is 4 a. How large is the recessionary gap after the fall in planned investment? The recessionary gap is times the size of the fall in planned investment. b. By how much would the government have to change its...
MULT CHOICE OPTIONS 1. decrease, stay unchanged, increase 2. increase, Stan unchanged, decrease 3.saving equals investment,...
MULT CHOICE OPTIONS
1. decrease, stay unchanged, increase
2. increase, Stan unchanged, decrease
3.saving equals investment, output reaches a peak, planned
investment is zero
The small island nation of Kaboom is a simple economy with no government, no taxes, and no imports or exports. Kaboomers (citizens of Kaboom) are creatures of habit. They have a rule that everyone saves exactly 25 percent of income. Assume that planned investment is fixed and remains at 225 million Kaboomian dollars. Further assume that...
First blank: Imports, exports, saving, or
taxes?
Select all that apply
Second Blank: Always, when savings equals planned
investment, when real GDP is equal to aggregate expenditure, or
when exports are equal to imports?
2. Leakages and injections Aa Aa E increases total injections into the Suppose the economy is initially in equilibrium, when an increase in economy. Which of the following will occur as a result of this change? I GDP rises above planned spending. O Firms experience an...
The Republic of Yuck is a simple economy with no government, no taxes, and no imports and exports. Yuckers (citizens of Yuck) are creatures of habit. They have a rule that everyone saves exactly 21 percent of income. Assume that planned investment is fixed and remains at 65 billion Yuck dollars. Expert economists of the Republic of Yuck have estimated the following: Real GDP (Y): Planned Investment Spending (I): 65 billion Yuck dollars 190 billion Yuck dollars You are asked...
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 -...
Problem 25-09 (algo) An economy with zero net exports is described below: C = 30 + 0.9 (Y-T) P = 100 G = 150 NX = 0 T = 180 The multiplier in this economy is 10. a. Find short-run equilibrium output. Instructions: Enter your responses as whole numbers. Short-run equilibrium output: b. Economic recovery abroad increases the demand for the country's exports; as a result, NX rises to 25. Short-run equilibrium output (Click to select) to . C. Assume...
QUESTION 3 Tribons of dolers GDP Consumption Government spending Exports Imports Budget balance Given the values in the table, and assuming transfer payments trillion (Round to one decimal place.) , compute the value of private saving. Private saving QUESTION 4 Trons GDP Consumption Government pending Exports Imports Budget balance What is the value of national savings for the hypothetical economy whose data is given in the table? National Savings trillion.(Round to one decimal place.) 5 QUESTION 5 Tribons of dollars...
An economy has no imports and no taxes, the MPC is 0.8, and real GDP is $250 billion. Businesses decrease investment by $5 billion. Calculate the new level of real GDP. Explain why real GDP decreases by more than $5 billion. The new level of real GDP is $ billion. Real GDP decreases by more than $5 billion because the decrease in investment_ 0 A. induces an increase in saving O B. decreases the marginal propensity to consume O C....
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...
An economy is initially at full employment, but a decrease in planned investment spending (a component of autonomous expenditure) pushes the economy into recession. Assume that the marginal propensity to consume (mpc) of this economy is 0.75 and that the multiplier is 4 a. How large is the recessionary gap after the fall in planned investment? The recessionary gap is times the size of the fall in planned investment. b. By how much would the government have to change its...
MULT CHOICE OPTIONS
1. decrease, stay unchanged, increase
2. increase, Stan unchanged, decrease
3.saving equals investment, output reaches a peak, planned
investment is zero
The small island nation of Kaboom is a simple economy with no government, no taxes, and no imports or exports. Kaboomers (citizens of Kaboom) are creatures of habit. They have a rule that everyone saves exactly 25 percent of income. Assume that planned investment is fixed and remains at 225 million Kaboomian dollars. Further assume that...
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