Homework Answers
ans a)Cborrower+Csaver=500+0.4Y+500+0.3Y
Cborrower+Csaver=1000+0.7Y
MPC=0.7
ans b) Y=C+I+G
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7. Suppose that there are two types of consumers: borrowers and savers. Consumption function of borrowers:...
Suppose the Consumption function for a particular economic system is: C = 150,000 +.95Y 1. What...
Suppose the Consumption function for a particular economic system is: C = 150,000 +.95Y 1. What is the Marginal Propensity to Consume for this economy? If aggregate income increases by $27 billion, what will happen to aggregate consumption spending? 2. At what level of Yis saving equal to zero? (That is, at what level of Y does the Consumption function intersect the 45 degree line?) 3. What is the Saving function for this economy? What is the Marginal Propensity to...
Suppose that the consumers spend 80% of each additional dollar of income. In other words, marginal...
Suppose that the consumers spend 80% of each additional dollar of income. In other words, marginal propensity to consume (c1) is 0.8. Assuming a hypothetical economy which is composed of households and firms, what is the value of multiplier? QUESTION 27 Assume that the marginal propensity to consume is 0.8. How much will the output increase as a result of a $100 increase in investment spending? O 400 O 500 O 100 O 50 QUESTION 28 Assuming that there is...
7. The Peterson's family has the following consumption function: C 50+2VY a. Calculate the marginal propensity...
7. The Peterson's family has the following consumption function: C 50+2VY a. Calculate the marginal propensity to consume when γ = 36 and give an economic interpretation of your answer b. From your answer above, what is Peterson's family's marginal propensity to save answer means in W
Economics 212: Principles of Macroeconomica Chapter 23 Problems ou are given the following data f...
Economics 212: Principles of Macroeconomica Chapter 23 Problems ou are given the following data for Freedonia: C 200 + 0.8Y 1 = 100 AE-Y (a) What is the marginal propensity to consume in Freedonia, and what is the marginal propensity to save? (b) Graph equations (3) and (4) and solve for equilibrium income. (c) Suppose investment rises to I'- 110. What is the new equilibrium level of income? What is the value of the investment multiplier? (d) Calculate the savings...
Question 13 (5 points) Suppose a closed economy has an aggregate consumption function given by C-200...
Question 13 (5 points) Suppose a closed economy has an aggregate consumption function given by C-200 +0.8Y, and generates $2.400 output and income in equilibrium. Suppose also that the government spends $350 and imposes a lump-sum tax of $300. How much will the private sector be saving total in equilibrium (S.)? Is the government running a deficit or surplus? By how much? (Circle 'surplus' or 'deficit' and enter the size (in dollars)) Is the private sector in deficit or surplus?...
Suppose a closed economy has an intended investment of 100 and an aggregate consumption function given...
Suppose a closed economy has an intended investment of 100 and an aggregate consumption function given by C = 250 +0.75Yd. Suppose also that the government spends 50 but collects no taxes. What is equilibrium output and income? (round your answer to the nearest whole value) Suppose a closed economy has an aggregate consumption function given by C = 200 +0.50 Yd and generates $2400 output and income in equilibrium. Suppose also that the government collects a lump-sum tax of...
ASSIGNMENT # 3 Actual aggregate expenditure or output (Y) (billions of $) Consumption (C) (billions of...
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Please give a detailed solution, thank you! 4. Two consumers (call them A and B) have utility functions over consumption...
Please give a detailed
solution, thank you!
4. Two consumers (call them A and B) have utility functions over consumption in period 1 and consumption in period 2 given by U (1,C2)n(c)ln(c2) In period 1, consumer A receives income of y 2, the endowments are reversed, consumer A gets y= 120 and consumer B gets y = 80 80 and consumer B receives y? = 120. In period (so they just a. First assume consumers are not allowed to save...
Consider a small economy that is closed to trade, so its net exports are equal to zero. Suppose that the economy has the following consumption function
5. Algebra of the income-expenditure model Consider a small economy that is closed to trade, so its net exports are equal to zero. Suppose that the economy has the following consumption function, where C is consumption, Y is real GDP, I is investment, G is government purchases, and T is for net taxes: C= 20 + 0.75 x (Y - T) Suppose G = $35 billion, 1 = $60 billion, and T = $20 billion. Given the consumption function and the fact that, in...
Suppose a closed economy has an aggregate consumption function given by C = 100 +0.75Yd and...
Suppose a closed economy has an aggregate consumption function given by C = 100 +0.75Yd and generates $2500 output and income in equilibrium. Suppose also that the government spends 500 and imposes a lump-sum tax of 50. What is the level of intended investment? (round your answer to the nearest whole value) Your Answer: Suppose a closed economy has an aggregate savings equal to 100 and intended investment equal to 500. 10 By how much must the government be in...
Suppose the Consumption function for a particular economic system is: C = 150,000 +.95Y 1. What is the Marginal Propensity to Consume for this economy? If aggregate income increases by $27 billion, what will happen to aggregate consumption spending? 2. At what level of Yis saving equal to zero? (That is, at what level of Y does the Consumption function intersect the 45 degree line?) 3. What is the Saving function for this economy? What is the Marginal Propensity to...
Suppose that the consumers spend 80% of each additional dollar of income. In other words, marginal propensity to consume (c1) is 0.8. Assuming a hypothetical economy which is composed of households and firms, what is the value of multiplier? QUESTION 27 Assume that the marginal propensity to consume is 0.8. How much will the output increase as a result of a $100 increase in investment spending? O 400 O 500 O 100 O 50 QUESTION 28 Assuming that there is...
7. The Peterson's family has the following consumption function: C 50+2VY a. Calculate the marginal propensity to consume when γ = 36 and give an economic interpretation of your answer b. From your answer above, what is Peterson's family's marginal propensity to save answer means in W
Economics 212: Principles of Macroeconomica Chapter 23 Problems ou are given the following data for Freedonia: C 200 + 0.8Y 1 = 100 AE-Y (a) What is the marginal propensity to consume in Freedonia, and what is the marginal propensity to save? (b) Graph equations (3) and (4) and solve for equilibrium income. (c) Suppose investment rises to I'- 110. What is the new equilibrium level of income? What is the value of the investment multiplier? (d) Calculate the savings...
Question 13 (5 points) Suppose a closed economy has an aggregate consumption function given by C-200 +0.8Y, and generates $2.400 output and income in equilibrium. Suppose also that the government spends $350 and imposes a lump-sum tax of $300. How much will the private sector be saving total in equilibrium (S.)? Is the government running a deficit or surplus? By how much? (Circle 'surplus' or 'deficit' and enter the size (in dollars)) Is the private sector in deficit or surplus?...
Suppose a closed economy has an intended investment of 100 and an aggregate consumption function given by C = 250 +0.75Yd. Suppose also that the government spends 50 but collects no taxes. What is equilibrium output and income? (round your answer to the nearest whole value) Suppose a closed economy has an aggregate consumption function given by C = 200 +0.50 Yd and generates $2400 output and income in equilibrium. Suppose also that the government collects a lump-sum tax of...
Please give a detailed
solution, thank you!
4. Two consumers (call them A and B) have utility functions over consumption in period 1 and consumption in period 2 given by U (1,C2)n(c)ln(c2) In period 1, consumer A receives income of y 2, the endowments are reversed, consumer A gets y= 120 and consumer B gets y = 80 80 and consumer B receives y? = 120. In period (so they just a. First assume consumers are not allowed to save...
Suppose a closed economy has an aggregate consumption function given by C = 100 +0.75Yd and generates $2500 output and income in equilibrium. Suppose also that the government spends 500 and imposes a lump-sum tax of 50. What is the level of intended investment? (round your answer to the nearest whole value) Your Answer: Suppose a closed economy has an aggregate savings equal to 100 and intended investment equal to 500. 10 By how much must the government be in...
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