Consumption spending in a country is represented by C = 1800+ 0.8(Y-T ). Planned investment is 900, government purchases G = 0, net exports NX = 100 and T = 0.2Y.
Write down planned aggregate spending of the economy as a function of Y. Zero points if you do not show your work. (3)
An important trading partner of the country goes through a major recession, decreasing the country’s net exports by $500. Use the Keynesian AE model to analyze the total impact of this shock on short-run equilibrium output, clearly explaining the multiplier effect. (5)
Consumption spending in a country is represented by C = 1800+ 0.8(Y-T ). Planned investment is...
Consumption spending in a country is represented by C = 1800+ 0.8(Y-T). Planned investment is 900, government purchases G = 0, net exports NX = 100 and T = 0.2Y. 1. Write down planned aggregate spending of the economy as a function of Y. Zero points if you do not show your work. (3) 2. An important trading partner of the country goes through a major recession, decreasing the country's net exports by $500. Ure the Keynesian AE model to...
An economy is described by the following equations: C= 1800 +0.6(Y-T) consumption function Ip = 900 planned investment G=1500 government spending NX = 100 net exports T= 1500 taxes Y* = 9000 potential output What is the output gap for this economy? If the natural rate of unemployment is 4 percent, what is the actual unemployment rate for this economy (use Okun's law)?
Question 2 (5 pts) An Economy is described by the following equations C-2600+0.8(Y-T)- 10000r I-2000-10000r G-1800 Net exports are zero, net taxes T are fixed at 3000, and the real interest rate r, expressed as a decimal is 0.10 (that is, 10 percent). Find a numerical equation relating planned aggregate expenditure to output. Using a table or other method, solve for short-run equilibrium output. Show your result graphically using the Keynesian cross diagram
Suppose consumption is given by: C=100+0.5(Y-T), planned investment is 200, government spending is 100, and the government is running a balanced budget. The tax multiplier is:
. Consider an economy described by the following equations. Ip = 700 X = 100 T = 1500 Y* = 10000 Cd = 1800 + 0.6(Y-T) G = 1500 M = 0 u* = 4 where Cd is consumption on domestically produced goods, G is government expenditure, M is imports, u* is the natural rate of unemployment, P is planned investment spending, X is exports, T is tax revenue and Pis potential output. Derive the equation for planned aggregate expenditure...
1. Suppose you are given the following information about Japan's economy: C = 150 + 0.8(Y-T) T = 0 Iplanned = 300 NX = 50 G = 200 a) Set up the aggregate planned expenditure function for Japan. (Write down the equation). b) Graph the aggregate expenditure function, using the diagram below. Be sure to label you graph. Carefully indicate the intercept. What is the slope of the line? c) Calculate equilibrium Real GDP (Y). d) Indicate the equilibrium on...
Consider the Keynesian Consumption function C 2000 + 0.8 (Y - T) C is personal consumption Y is personal income T is income taxes Also suppose Y = 40,000 T = 0.25Y Calculate APC and APS Calculate the Multiplier and interpret its value
ASSIGNMENT # 3 Actual aggregate expenditure or output (Y) (billions of $) Consumption (C) (billions of $) Planned investment (billions of $) Government spending (G) (billions of $) Net exports (NX) (billions of $) Unplanned investment (inventory change) (billions of $) 500 300 150 100 50 600 350 700 400 800 450 900 500 For the table shown, answer the following questions: For each level of actual aggregate expenditure, calculate unplanned inventory investment. What is the equilibrium level of aggregate...
The table shows real? GDP, Y?, consumption? expenditure, C?, ?investment, I?, government expenditure on goods and? services, G?, ?exports, X?, ?imports, M?, and aggregate planned? expenditure, and AE?, in millions of dollars. Taxes are constant. If investment crashes to? $0.55 trillion but nothing else? changes, what is equilibrium expenditure and what is the? multiplier? Homework: Chapter 14 Save Score: 0 of 1 pt 17 of 25 (19 complete) HW Score: 76%, 19 of 25 pts Chapter Problem5 Question Help *...
Problem 25-09 (algo) An economy with zero net exports is described below: C = 30 + 0.9 (Y-T) P = 100 G = 150 NX = 0 T = 180 The multiplier in this economy is 10. a. Find short-run equilibrium output. Instructions: Enter your responses as whole numbers. Short-run equilibrium output: b. Economic recovery abroad increases the demand for the country's exports; as a result, NX rises to 25. Short-run equilibrium output (Click to select) to . C. Assume...