1.Use a chart to show how 10 rounds of expenditure will increase real GDP. In particular, show the increase in the current round, and the cumulative increase from previous rounds.
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Assume MPC = 0.8 and investment raised by 100 crores. It will directly raise the level of income by 100 crore as one person spending is another person income.
Round | Change in Investment | Increase in GDP | Cumulative Increase in GDP |
1 | 100 | 100.00 | 100.00 |
2 | - | 80.00 | 180.00 |
3 | - | 64.00 | 244.00 |
4 | - | 51.20 | 295.20 |
5 | - | 40.96 | 336.16 |
6 | - | 32.77 | 368.93 |
7 | - | 26.21 | 395.14 |
8 | - | 20.97 | 416.11 |
9 | - | 16.78 | 432.89 |
10 | - | 13.42 | 446.31 |
1.Use a chart to show how 10 rounds of expenditure will increase real GDP. In particular,...
(10 pts) Use a chart to show how 10 rounds of expenditure will increase real GDP. In particular, show the increase in the current round, and the cumulative increase from previous rounds. Expenditure Multipliers”: (20 points) (10 pts) Describe how the multiplier process works.
a. (10 pts) Describe how the multiplier process works. b. (10 pts) Use a chart to show how 10 rounds of expenditure will increase real GDP. In particular, show the increase in the current round, and the cumulative increase from previous rounds.
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...
DO #1
Real GDP is intended to measure the real value of goods and
services produced, not the stock of money, or the balance in your
bank account, or whether you are in debt or not. To do this, we may
use information on total expenditures - measured in dollars - but
the purpose is always to recover an index of real output. For this
homework, you need the following information to calculate real GDP
over several periods. First, you...
Question#1A The following are details of the expenditure of a very small economy. All the autonomous expenditures are given in $ thousand. C = 200 + 0.8Yd I = 10 G = 50 T = 0.05Y X = 40 M = 0.1Y Derive the aggregate expenditure function, and calculate the equilibrium real GDP Determine the expenditure multiplier using aggregate expenditure function slope value Question#1B Suppose the slope of the AE curve is 0.80. i) What is the expenditure multiplier? ii) Everything else the same, by how much does equilibrium aggregate expenditure...
(4 marks) Suppose both nominal GDP and real GDP rise by 10 percent. How will the GDP deflator change? What has happened to the general price level? What is the inflation rate? Show your calculation. (4 marks) Other things being the same, if an unemployed person gives up searching for jobs and becomes a stay-at-home parent, what will happen to the labor force, the number of unemployed persons and the unemployment rate? Explain briefly.
150 Price level (GDP defa 200/100 LAS 140 SAS How does an increase in autonomous expenditure change real GDP in the short run? Does real GDP charge by the same amount as the change in aggregate demand? Why or why not? Use the graph to answer these questions AD, is the aggregate demand curve when investment is $10 milion Investment increases to $1.5 trilion, and the multiplier when the price level is constantis Draw the new aggregate demand curve and...
DO#3
Real GDP is intended to measure the real value of goods and
services produced, not the stock of money, or the balance in your
bank account, or whether you are in debt or not. To do this, we may
use information on total expenditures - measured in dollars - but
the purpose is always to recover an index of real output. For this
homework, you need the following information to calculate real GDP
over several periods. First, you know...
DO #2
Real GDP is intended to measure the real value of goods and
services produced, not the stock of money, or the balance in your
bank account, or whether you are in debt or not. To do this, we may
use information on total expenditures - measured in dollars - but
the purpose is always to recover an index of real output. For this
homework, you need the following information to calculate real GDP
over several periods. First, you...
If the expected inflation rate increases by 10 percentage points, how do the short-run Phillips curve and the long-run Phillips curve converge? please explain it as it's 15 marks and ASAP