Homework Answers
As shown in the figure , equilibruim output is at $ 200 where 45 degree line and Aggregate expenditure line intersect each other . If there government decided to remove taxes , and then increasing government will increase the aggregate expenditure of government and shift it upwards .
New equilibruim output will be at $ 300
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Aggregate expenditures If the government does not take taxes from citizen (like in some Gulf count...
Income (Y) Consumption (C) Investment Expenditures (I) Government Expenditures (G) Net Export Expenditures (NX) Aggregate Expenditures...
Income (Y) Consumption (C) Investment Expenditures (I) Government Expenditures (G) Net Export Expenditures (NX) Aggregate Expenditures (AE) $8000 12400 2000 3000 -1000 10000 14000 2000 3000 -1000 14000 17200 2000 3000 -1000 20000 22000 2000 3000 -1000 30000 30000 2000 3000 -1000 50000 46000 2000 3000 -1000 80000 70000 2000 3000 -1000 d.) If the government wants to increase the same amount of increased in equilibrium level of income through tax cuts, the government should decrease taxes by how much...
Income (Y) Consumption (C) Investment Expenditures (I) Government Expenditures (G) Net Export Expenditures (NX) Aggregate Expenditures...
Income (Y) Consumption (C) Investment Expenditures (I) Government Expenditures (G) Net Export Expenditures (NX) Aggregate Expenditures (AE) $8000 12400 2000 3000 -1000 10000 14000 2000 3000 -1000 14000 17200 2000 3000 -1000 20000 22000 2000 3000 -1000 30000 30000 2000 3000 -1000 50000 46000 2000 3000 -1000 80000 70000 2000 3000 -1000 c.) What would be the new equilibrium income level if the government expenditures were increased to $9,000? What is the increased equilibrium level of income?
(1) Other things being equal, which of the following will increase aggregate expenditures? Group of answer...
(1) Other things being equal, which of the following will increase aggregate expenditures? Group of answer choices An increase in domestic prices relative to foreign prices A decrease in the interest rate A decrease in real wealth An increase in income taxes A decrease in government purchases of goods and services (2) If the current unemployment rate is 5 percent and the natural unemployment rate is 6 percent, then the economy is Group of answer choices producing a level of...
1. In a closed economy to have sustainable output, Aggregate Expenditures are equal to
1. In a closed economy to have sustainable output, Aggregate Expenditures are equal toa. Consumptionb. Consumption + Investmentc. Consumption + Investment + Govemmentd. Consumption + Investment + Net Exports2. The calculation 1 /(1-MPC) equalsa. Marginal Propensity to Saveb. Multiplierc. Aggregate Expenditured. Average Consumption3. In a closed economy, when Aggregate Expenditures equal GDP.a. Consumption equals investmentb. Consumption equals aggregate expenditurec. Saving = Planned Investmentd. Disposable income equals consumption minus saving4. Net exports are calculated asa. Importsb. Imports - Exportsc. Exports -...
Problem 11-7 (Algo) Refer to columns1 and 6 In the table below. Aggregate Expenditures Real Domes...
Problem 11-7 (Algo) Refer to columns1 and 6 In the table below. Aggregate Expenditures Real Domestic DI), Billions 5300 5350 5400 5450 $500 $550 5600 $650 Aggregate Exports Billions Output, (GDP Imports, BillionsBillions Net ExportsExpenditures Private Closed Economy, Billions 5340 S380 5420 5480 $500 $540 $580 $620 S30 S30 S30 S30 S30 S30 S30 S30 S20 S20 S20 S20 S20 S20 S20 S20 510 510 510 510 510 510 510 510 Private Open Economy, Billion:s S350 390 S430 S470 S510...
Economics 121 Practice Problem 1. Assume the aggregate expenditures model with the following values C =...
Economics 121 Practice Problem 1. Assume the aggregate expenditures model with the following values C = 200 +.8*DI 1. = 200 There is no government purchases, taxes or net exports a. Complete the table below b. What is equilibrium GDP? c. Suppose I, rises from 200 to 300. What is the new equilibrium level of GDP? GDP C S l C+1 1000 1500 2000 2500 3000
1.Consider a closed economy with no taxes, whose consumption function, investment level & government spending level...
1.Consider a closed economy with no taxes, whose consumption function, investment level & government spending level are given by the following equations: C= 5,000 + .80Y I= 9,000 G= 2000 whereGrepresents government spending. The equilibrium condition is, as always, that the value of the economy’s output (Y) must be matched by aggregate demand, but now aggregate demand contains a third element, G. a. What is the equilibrium level of aggregate output for this economy? b. What is the saving function for this...
22. Why is the multiplier for a change in taxes smaller than for a change in spendi...
22. Why is the multiplier for a change in taxes smaller than for a change in spending? a. A change in taxes has no effect on aggregate demand, only on aggregate supply. b. A change in taxes directly affects government spending as well, lowering the multiplier. c. A change in taxes affects spending directly, but at a slower rate than spending does. d. A change in taxes affects disposable income and then consumption rather than spending directly....
1. Consider an economy where aggregate expenditures can be characterized by the following information: household consumption...
1. Consider an economy where aggregate expenditures can be characterized by the following information: household consumption C = 100+ 0.8Yd, investment expenditure 1 = 100, government expenditure G = 300, exports X = 300 and imports IM = 0.14Y. Suppose that the income tax rate is 20%, and that the government has no initial debt, so that D = 0. (a) Solve for the AE function and the equilibrium level of national output Y. (b) Solve for the government's budget...
QUESTION 1 Suppose that the behavior of households, firms and the government in an economy is...
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....
1. In a closed economy to have sustainable output, Aggregate Expenditures are equal toa. Consumptionb. Consumption + Investmentc. Consumption + Investment + Govemmentd. Consumption + Investment + Net Exports2. The calculation 1 /(1-MPC) equalsa. Marginal Propensity to Saveb. Multiplierc. Aggregate Expenditured. Average Consumption3. In a closed economy, when Aggregate Expenditures equal GDP.a. Consumption equals investmentb. Consumption equals aggregate expenditurec. Saving = Planned Investmentd. Disposable income equals consumption minus saving4. Net exports are calculated asa. Importsb. Imports - Exportsc. Exports -...
Problem 11-7 (Algo) Refer to columns1 and 6 In the table below. Aggregate Expenditures Real Domestic DI), Billions 5300 5350 5400 5450 $500 $550 5600 $650 Aggregate Exports Billions Output, (GDP Imports, BillionsBillions Net ExportsExpenditures Private Closed Economy, Billions 5340 S380 5420 5480 $500 $540 $580 $620 S30 S30 S30 S30 S30 S30 S30 S30 S20 S20 S20 S20 S20 S20 S20 S20 510 510 510 510 510 510 510 510 Private Open Economy, Billion:s S350 390 S430 S470 S510...
Economics 121 Practice Problem 1. Assume the aggregate expenditures model with the following values C = 200 +.8*DI 1. = 200 There is no government purchases, taxes or net exports a. Complete the table below b. What is equilibrium GDP? c. Suppose I, rises from 200 to 300. What is the new equilibrium level of GDP? GDP C S l C+1 1000 1500 2000 2500 3000
1. Consider an economy where aggregate expenditures can be characterized by the following information: household consumption C = 100+ 0.8Yd, investment expenditure 1 = 100, government expenditure G = 300, exports X = 300 and imports IM = 0.14Y. Suppose that the income tax rate is 20%, and that the government has no initial debt, so that D = 0. (a) Solve for the AE function and the equilibrium level of national output Y. (b) Solve for the government's budget...
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....
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