B,c,d,e please solve Suppose in the economy autonomous consumption - $100, autonomous investmen $120, government purchases...
Problem 4 Consider the following economy: Consumption Expenditure 446,832 million Planned Investment Expenditure 346,877 million Government Expenditure 446,832 million Exports 402,443 million Imports 388,374 million Marginal Propensity to Save 0.3 Marginal Tax Rate 0.32 Autonomous Taxes 301,240 million Marginal Propensity to Import (nx) 0.04 (a) Calculate the equilibrium level of income. (0.5 mark) (b) Calculate autonomous consumption. (0.5 mark) (c) Calculate autonomous net exports. (0.5 mark) (d) Calculate autonomous planned expenditures. (0.5 mark) (e) Calculate the marginal leakage rate. (0.5 mark) (f) Assume that the...
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?...
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...
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...
Suppose the marginal propensity to consume if 0.75 and autonomous consumption (consumption at zero income) is $4,000. If income is $50,000, consumption spending is a. $37,500 b. $41,500 C. $45,500 d. $54,000 QUESTION 4 If the consumption function for an economy is C = 180 + 75 Yd (disposable income) and spending increases by $800, then the resulting change in national income is a. +$2,800 OOO b. 5-3,200 c. $-2,800 d. $+3,200 QUESTION 5 Assume the actual GDP is $4800...
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 mpc of this economy is 0.75 and that the multiplier is 4. LO4, L05) a. How large is the recessionary gap after the fall in planned investment? b. By how much would the government have to change its purchases to restore the economy to full employment? c. Alternatively, by how much would the...
Question 33 (20 points) Consumption $550 Investment $200 Exports $60 Imports $90 Government Spending $100 Taxes $70 Potential Real Output (Long $800 run Real Output) The above macroeconomic data are from the economy in 2019. Dollar values are measured in billions of 2019 dollars. (a) is the economy facing a recessionary gap, an inflationary gap, or neither? Explain using numbers. (b) Based on your answer to part (a), how will the economy adjust in the long run in the absence...
In Japan, taxes and real imports do not depend on real income. Autonomous real consumption is ¥400 million, lump-sum taxes (taxes that do not depend on real income) are ¥100 million, investment spending is ¥300 million, Japanese government spending is ¥100, and real net exports are ¥0, The Japanese Marginal Propensity to Consume is 0.60. a. Solve for the equilibrium level of Japanese real GDP. b. Suppose that more foreign investors begin to buy Japanese stocks on the Tokyo Stock...
The graph shows an economy that is above full employment. To restore full employment, the government decreases government expenditure by $0.5 trillion. Draw a curve to show the effect of the decrease if this is the only change in spending plans. Label the curve AD0-ΔE The decrease in government expenditure sets off a multiplier process. Draw a curve that shows the multiplier effect that returns the economy to full employment. Label it AD Draw a point at the full-employment equilibrium...
QUESTION 1 Suppose that the behavior of households, firms and the government in an economy is determined by the following equations: C-180+0.75Y 1150 G-55 T-90 TWR30 The full employment level of output in the economy is: YFE 1200 Find an expression for aggregate expenditure (This should take the form of AE - abY, where a and b are numbers) il. What is the equilibrium level of output? YE = ill. What is the government spending multiplier in this economy? iv....