Homework Answers
12.
a) Planned Investment = distance between the function C+Iplanned and function C
= 500-75
= 425
Hence, the quantity of planned investment is 425.
b) Muliplier= Change in income/Change in autonomous spending
= (1000-150)/(500-75)
= 850/425
= 2
Hence, the value of multiplier is 2
c) Unplanned Inventories (IU) at Y= 750
IU= 750-150
= 600
Hence, unplanned inventories at Y= 750 is 600
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12. For the following questions refer to Figure 2. Spending C + Planned...
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9. Suppose that consumption and planned investment are given respectively by C = 1000+0.65Y & Iplanned = 500+0.15Y (a) Find the equilibrium level of output in this economy. 5 points. (b) Sketch and fully label the Keynesian cross diagram for this economy. 5 points. (c) Suppose that consumers decrease their mpe by 0.35 due to uncertain times. What is the change in the equilibrium income? 5 points.
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10. For the next question, please refer to Figure 1 below. GDP per worker 500 350 250 نیم PC с 50 Physical Capital Per Worker 100 300 500 Figure 1: Labor Productivity Suppose that a country that was once at point A is now at point D; what share of the growth in labor productivity was due to technology and due to physical capital investment? 5 points. 11. Explain the interest rate effect and how it can be...
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ASSIGNMENT # 3 Actual aggregate expenditure or output (Y) (billions of $) Consumption (C) (billions of...
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1,600 Planned aggregate expenditure, AE (billions of dollars) OS 1,600 Aggregate output, Y billions of dollars) Figure 24.5 1) Refer to Figure 24.5. If the economy is in equilibrium and the government decreases spending by $200 billion, equilibrium aggregate output decreases to S billion. A) 1,400 B) 1,200 C) 1,000 D) 800 2) Refer to Figure 24.5. If the economy is in equilibrium and the government increases...
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Consumption spending in a country is represented by C = 1800+ 0.8(Y-T ). Planned investment is 900, government purchases G = 0, net exports NX = 100 and T = 0.2Y. Write down planned aggregate spending of the economy as a function of Y. Zero points if you do not show your work. (3) An important trading partner of the country goes through a major recession, decreasing the country’s net exports by $500. Use the Keynesian AE model to analyze...
Consumption spending in a country is represented by C = 1800+ 0.8(Y-T). Planned investment is 900,...
Consumption spending in a country is represented by C = 1800+ 0.8(Y-T). Planned investment is 900, government purchases G = 0, net exports NX = 100 and T = 0.2Y. 1. Write down planned aggregate spending of the economy as a function of Y. Zero points if you do not show your work. (3) 2. An important trading partner of the country goes through a major recession, decreasing the country's net exports by $500. Ure the Keynesian AE model to...
7. Equilibrium GDP on the demand side occurs when a. total spending equals total production, and...
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9. Suppose that consumption and planned investment are given respectively by C = 1000+0.65Y & Iplanned = 500+0.15Y (a) Find the equilibrium level of output in this economy. 5 points. (b) Sketch and fully label the Keynesian cross diagram for this economy. 5 points. (c) Suppose that consumers decrease their mpe by 0.35 due to uncertain times. What is the change in the equilibrium income? 5 points.
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10. For the next question, please refer to Figure 1 below. GDP per worker 500 350 250 نیم PC с 50 Physical Capital Per Worker 100 300 500 Figure 1: Labor Productivity Suppose that a country that was once at point A is now at point D; what share of the growth in labor productivity was due to technology and due to physical capital investment? 5 points. 11. Explain the interest rate effect and how it can be...
provide an explanation with a steps of the answer for each
question please
1,600 Planned aggregate expenditure, AE (billions of dollars) OS 1,600 Aggregate output, Y billions of dollars) Figure 24.5 1) Refer to Figure 24.5. If the economy is in equilibrium and the government decreases spending by $200 billion, equilibrium aggregate output decreases to S billion. A) 1,400 B) 1,200 C) 1,000 D) 800 2) Refer to Figure 24.5. If the economy is in equilibrium and the government increases...
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1. Suppose that consumers plan, based on their current expected income of 360 million, to spend 250 million, while firms plan to spend 180 million on investment goods, and government spending and net exports are both 0. What is the level of unplanned inventories in the economy? What will happen to incomes? 5 points.
Consumption spending in a country is represented by C = 1800+ 0.8(Y-T). Planned investment is 900, government purchases G = 0, net exports NX = 100 and T = 0.2Y. 1. Write down planned aggregate spending of the economy as a function of Y. Zero points if you do not show your work. (3) 2. An important trading partner of the country goes through a major recession, decreasing the country's net exports by $500. Ure the Keynesian AE model to...
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