Homework Answers
22 )
Multiplier Value = 1/1-MPC
= 1/1-0.75
= 1/0.25
= 4
23)
Value of Tax multiplier = 0.75/0.25
= 3
Hence, if taxes equal to 12 raised, income will fall by 36.
Answer: 12’
24)
Negative income tax is called transfer payments.
Answer: Transfer payment.
25)
Answer: Substitution effect.
Fall in price leads to rise in demand is explained through the substitution effect.
Add Answer to:
Assume the consumption schedule for a private closed economy is C-40+ 0.75Y, where C is consumption...
Assume that, without taxes, the consumption schedule of an economy is as follows: a. What is...
Assume that, without taxes, the consumption schedule of an
economy is as follows:
a. What is the value of the MPC?
_______
.Graph the resulting consumption
schedule.
Instructions: Use the tool provided 'CE' to draw
the consumption schedule. Plot 8 points total.
b. Assume now that a lump-sum tax is imposed such that the
government collects $10 billion in taxes at all levels of GDP. Add
the after-tax consumption to the table below.
Compare the MPC and the
multiplier with...
Assume that, without taxes, the consumption schedule of an economy is as follows GDP, Billions Consumption,...
Assume that, without taxes, the consumption schedule of an economy is as follows GDP, Billions Consumption, Billions $0 100 200 300 $40 120 200 280 360 440 520 600 400 500 600 700 a. What is the value of the MPC? Graph the resulting consumption schedule. Instructions: Use the tool provided "CE to draw the consumption schedule (plot 8 points total). Consumption Expenditure Tools CE Consumption (billions of dollars) 45 100 200 300 400 500 600 700 800 Help Save...
Use the data in the following table for a private closed economy to answer the next...
Use the data in the following table for a private closed economy to answer the next question. All figures are in billions of dollars. Domestic Output or Income (GDP = DI) Consumption $540 $540 560 555 580 570 600 585 620 600 640 615 660 630 The MPC and multiplier are, respectively 0.80 and 5. 0.75 and 4 0.75 and 1.33 0.80 and 1.25 Question 20 1 pts Use the following graph with data for a private closed economy to...
ADVANCED ANALYSIS Assume that the consumption schedule for a private open economy is such that consumption...
ADVANCED ANALYSIS Assume that the consumption schedule for a private open economy is such that consumption is:C = 100+ 0.8Y Assume further that planned investment lo and net exports Xn are independent of the level of real GDP and constant at lg = 60 and Xn = 10. Government spending (G) is equal to $0. Recall also that, in equilibrium, the real output produced (y) is equal to aggregate expenditures: Y=C+Ig+G+Xn nstructions: Round your answers to the nearest whole number. a. What is the...
6a. Assume a closed economy with no government, in which the aggregate consumption function is C...
6a. Assume a closed economy with no government, in which the aggregate consumption function is C = 100 + .75Y and investment (I) is $100 billion. In the income-expenditure analysis, the equilibrium level of national income is: a. $300 billion. b. $500 billion. c. $200 billion. d. $800 billion. e. $650 billion. 6b. The difference between a household’s disposable income and its consumption: a. equals any saving by the household. b. equals the taxes the household pays. c. equals the...
Consider a small country that is closed to trade, so its net exports are equal to zero. The following equations describe the economy of this country in billions of dollars, where C is consumption, DI...
Consider a small country that is closed to trade, so its net exports are equal to zero. The following equations describe the economy of this country in billions of dollars, where C is consumption, DI is disposable income, I is investment, and G is government purchases:C=100+0.75×DI G= 50 I=80 Initially, this economy had a lump sum tax. Suppose net taxes were $40 billion, so that disposable income was equal to Y – 40, where Y is real GDP. In this...
3. You are given the following information about the economy: autonomous consumption = $300 billion ...
3. You are given the following information about the economy: autonomous consumption = $300 billion planned investment = $300 billion government spending = $500 billion mpc = .8 imports = $200 billion exports = $500 billion a. Using the values above, what is the equation for the consumption function? b. Using the values above, what is the income/spending multiplier? c. What is the value of Net Exports? d. Is there a trade surplus or deficit? Of how much?...
hestion Completion Status: QUESTION Consider a private, closed economy where aggregate consumption C depends on aggregate...
hestion Completion Status: QUESTION Consider a private, closed economy where aggregate consumption C depends on aggregate income Y according to the equation C. 15 0.5 Y. where planned investment is IP - 15. Using the above information, complete the following table: Y c R AER_ where AEP stands for aggregate expenditure planned. 1) Suppose that the GDP initially is Y 50. Obtain the corresponding levels of savings S and unplanned investment Is Y = 40 an income. expenditure equilibrium? If...
sing and government purchases are leakages. 8. In a mixed closed economy: A taxes and government...
sing and government purchases are leakages. 8. In a mixed closed economy: A taxes and government purchases are leakages, while investment and saving are injections. • taxes and investment are injections, while saving and government purchases are leakages. taxes and savings are leakages, while investment and government purchases are injections. 1. government purchases and saving are injections, while investment and taxes are leakages. 9. In a mixed open economy, the equilibrium GDP is determined at that point where: A.S. +M+...
1. Suppose in a simple closed economy with MPC = 0.75, the planned investment spending nas...
1. Suppose in a simple closed economy with MPC = 0.75, the planned investment spending nas suddenly fallen, reducing AD and output to a level that below the natural level of output by 100 Million. Assume that the real interest rate is constant so that there is no crowding out of (gross) investment. (a) If the government decided to try to get the output back to the natural level of output using only a change in government spending (AG), by...
Assume that, without taxes, the consumption schedule of an
economy is as follows:
a. What is the value of the MPC?
_______
.Graph the resulting consumption
schedule.
Instructions: Use the tool provided 'CE' to draw
the consumption schedule. Plot 8 points total.
b. Assume now that a lump-sum tax is imposed such that the
government collects $10 billion in taxes at all levels of GDP. Add
the after-tax consumption to the table below.
Compare the MPC and the
multiplier with...
Assume that, without taxes, the consumption schedule of an economy is as follows GDP, Billions Consumption, Billions $0 100 200 300 $40 120 200 280 360 440 520 600 400 500 600 700 a. What is the value of the MPC? Graph the resulting consumption schedule. Instructions: Use the tool provided "CE to draw the consumption schedule (plot 8 points total). Consumption Expenditure Tools CE Consumption (billions of dollars) 45 100 200 300 400 500 600 700 800 Help Save...
Use the data in the following table for a private closed economy to answer the next question. All figures are in billions of dollars. Domestic Output or Income (GDP = DI) Consumption $540 $540 560 555 580 570 600 585 620 600 640 615 660 630 The MPC and multiplier are, respectively 0.80 and 5. 0.75 and 4 0.75 and 1.33 0.80 and 1.25 Question 20 1 pts Use the following graph with data for a private closed economy to...
ADVANCED ANALYSIS Assume that the consumption schedule for a private open economy is such that consumption is:C = 100+ 0.8Y Assume further that planned investment lo and net exports Xn are independent of the level of real GDP and constant at lg = 60 and Xn = 10. Government spending (G) is equal to $0. Recall also that, in equilibrium, the real output produced (y) is equal to aggregate expenditures: Y=C+Ig+G+Xn nstructions: Round your answers to the nearest whole number. a. What is the...
hestion Completion Status: QUESTION Consider a private, closed economy where aggregate consumption C depends on aggregate income Y according to the equation C. 15 0.5 Y. where planned investment is IP - 15. Using the above information, complete the following table: Y c R AER_ where AEP stands for aggregate expenditure planned. 1) Suppose that the GDP initially is Y 50. Obtain the corresponding levels of savings S and unplanned investment Is Y = 40 an income. expenditure equilibrium? If...
sing and government purchases are leakages. 8. In a mixed closed economy: A taxes and government purchases are leakages, while investment and saving are injections. • taxes and investment are injections, while saving and government purchases are leakages. taxes and savings are leakages, while investment and government purchases are injections. 1. government purchases and saving are injections, while investment and taxes are leakages. 9. In a mixed open economy, the equilibrium GDP is determined at that point where: A.S. +M+...
1. Suppose in a simple closed economy with MPC = 0.75, the planned investment spending nas suddenly fallen, reducing AD and output to a level that below the natural level of output by 100 Million. Assume that the real interest rate is constant so that there is no crowding out of (gross) investment. (a) If the government decided to try to get the output back to the natural level of output using only a change in government spending (AG), by...
Most questions answered within 3 hours.
-
If
the more comprehensive data is available in MEPS, why does the NHIS
still exist? How...
asked 18 minutes ago -
Koo argues that the Japanese economy in the 1990s suffered from
a balance sheet recession. What...
asked 11 minutes ago -
Automobile mechanics conduct diagnosis tests on 150 new cars of
particular make and model to determine...
asked 5 minutes ago -
11) Find the proceeds of a 5 year non-interest
bearing note for $6500 discounted 2.5 years...
asked 12 minutes ago -
Required: Prepare the consolidated financial statements of
Griffin Ltd at 30 June 2019.
Griffin Ltd is...
asked 21 minutes ago -
1.How large must the coefficient of static friction be between
the tires and the road if...
asked 36 minutes ago -
What is the time complexity (Big-O) of the following code?
class Main
{
// Recursive...
asked 36 minutes ago -
Economists look at any situation in terms of its component
parts: the people making decisions, the...
asked 42 minutes ago -
What is a population?
Select one:
a. All of the individual organisms belonging to the same...
asked 46 minutes ago -
You have a yeast cell culture with a concentration of 5x10^4
cells/ml. If you dilute this...
asked 50 minutes ago -
In which direction the Reaction goes? Show detailed process.
SeO3 + 2ClO2. + 2H3O <---> Se...
asked 1 hour ago -
Unexposed silver halides are removed from photographic film when
they react with sodium thiosulfate
(Na2S2O3, called...
asked 1 hour ago