Imagine the economy is defined by the consumption function of C = 140 + 0.9 (Yd)...
Imagine the economy is defined by the consumption function of C = 140 + 0.9 (Yd) where 140 is autonomous consumption, 0.9 is marginal propensity to consume, and Yd is disposable income (after taxes) and Yd=Y-T, where Y is national income (or GDP) and T=Tax Revenues=0.3Y (0.3 is the avg. income tax rate). To find the macro equilibrium use the following equation Y = C + I + G + (X - M). Where C=140 + 0.9(Yd), I=400, G=800, X=600, M=0.15Y. What is the aggregate expenditure for this economy? [Remember Y=AE]
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Imagine the economy is defined by the consumption function of C
= 140 + 0.9 (Yd)...
A5-10. Suppose the following aggregate expenditure model describes an economy: C = 100 + (5/6)Yd T...
A5-10. Suppose the following aggregate expenditure model describes an economy: C = 100 + (5/6)Yd T = (1/5)Y 1 = 200 G = 400 X = 300 IM = (1/3)Y where C is consumption, Yd is disposable income, T is taxes, Y is national income, I is investment, G is government spending, X is exports, and IM is imports. (a) Derive a numerical expression for aggregate expenditure (AE) as a function of Y. Calculate the equilibrium level of national income....
Suppose an economy is characterized by the following equations C-260+0.6 Yd Yd-Y-T I-250 G-250 T =...
Suppose an economy is characterized by the following equations C-260+0.6 Yd Yd-Y-T I-250 G-250 T = 200 Is this econ Determine the following: omy closed or open? Explain 1) The equilibrium level of GDP (Y) 2) The total disposable income (%) of the household 3) Total consumption expenditure 4) Private savings of household, government savings and the national savings of the economy 5) Is private savings the same as aggregate investment? Explain
17. Keynesian consumption function: a) C = C + mpcy b) I = I c)t 18....
17. Keynesian consumption function: a) C = C + mpcy b) I = I c)t 18. Keynesian government spending multiplier a) AC b) AY = AG c) mpc 19. Keynesian fiscal policy in a closed economy: considering that AE =C+I+G + mpc(1 - ty! where t is the tax rate, the government could increase the aggregate expenditure a) increasing the tax rate b) reducing the tax rate 20. If the marginal propensity to consume (mpc) increase, the Keynesian multiplier effect...
Assume that Miriam’s consumption function is C = a + b(Y d), where Y d =...
Assume that Miriam’s consumption function is C = a + b(Y d),
where Y d = (Y − T ) is disposable income, defined as the
difference between income Y and taxes T. You observed that, after
an increase in taxes T by $80, Miriam’s consumption C decreased by
$60. If Miriam’s income (Y ) did not change, you can deduce that
her marginal propensity to consume (MPC) is
23. Assume that Miriam's consumption function is C = a +b(yd),...
QUESTION TWO An economy is represented by the following set of equations: Y = C +...
QUESTION TWO An economy is
represented by the following set of equations: Y = C + I C = 80m +
1.6Y where Y represents aggregate expenditure C represents
consumption expenditure by households I represents investment
expenditure by firms M is millions of Ghana cedis (a) (i) Explain
why the model is not an open economy? (2 marks) (ii) Explain
investment expenditure (I) as used in the model. (3 marks) (b)
Using the consumption function, estimate the autonomous
consumption; marginal...
Income (Yd) Consumption Expenditure Saving Investment Expenditure Government Expenditure Net Export Expenditure Aggregate Expenditure $8000...
Income (Yd) Consumption Expenditure Saving Investment Expenditure Government Expenditure Net Export Expenditure Aggregate Expenditure $8000 $11,000 $2,500 $5,000 $12,500 12,000 14,000 2,500 5,000 12,500 20,000 20,000 2,500 5,000 12,500 30,000 27,500 2,500 5,000 12,500 50,000 42,500 2,500 5,000 12,500 100,000 80,000 2,500 5,000 12,500 Calculate savings, MPC, MPS, break even income, and the equilibrium level of income (Y = AE = C + I + G +NX) in the above given information. Draw a graph showing disposable income (Yd)...
Macroeconomics Assignment 2 1. The table shows disposable income and consumption expenditure in an economy. Use...
Macroeconomics Assignment 2 1. The table shows disposable income and consumption expenditure in an economy. Use the table to work Problems A and B. Disposable Consumption income expenditure (Billions of dollars) 800 1,000 A. Calculate saving at each level of disposable income. Over what range of disposable income does consumption expenditure exceed disposable income? Calculate autonomous consumption expenditure. B. Calculate the marginal propensity to consume. At what level of disposable income will savings be zero? If expected future income increases,...
For a hypothetical economy, suppose the consumption equation is C = 30 + 0.65Y, where C...
For a hypothetical economy, suppose the consumption equation is C = 30 + 0.65Y, where C is households’ consumption and Y is disposable income. If the disposable income is $600, carefully show your steps and calculate: The levels of (i) consumption and (ii) saving. The marginal propensity to (i) consume and (ii) save. The average propensity to (i) consume and (ii) save. Interpret your estimates in (c).
Assuming that the consumption function is C = 300 + 0.5Yd where Yd is disposable income...
Assuming that the consumption function is C = 300 + 0.5Yd where Yd is disposable income and is equal to 500, autonomous consumption is equal to: 0 550 0 300 0 450 0 800
A5-10. Suppose the following aggregate expenditure model describes an economy: C = 100 + (5/6)Yd T = (1/5)Y 1 = 200 G = 400 X = 300 IM = (1/3)Y where C is consumption, Yd is disposable income, T is taxes, Y is national income, I is investment, G is government spending, X is exports, and IM is imports. (a) Derive a numerical expression for aggregate expenditure (AE) as a function of Y. Calculate the equilibrium level of national income....
Suppose an economy is characterized by the following equations C-260+0.6 Yd Yd-Y-T I-250 G-250 T = 200 Is this econ Determine the following: omy closed or open? Explain 1) The equilibrium level of GDP (Y) 2) The total disposable income (%) of the household 3) Total consumption expenditure 4) Private savings of household, government savings and the national savings of the economy 5) Is private savings the same as aggregate investment? Explain
17. Keynesian consumption function: a) C = C + mpcy b) I = I c)t 18. Keynesian government spending multiplier a) AC b) AY = AG c) mpc 19. Keynesian fiscal policy in a closed economy: considering that AE =C+I+G + mpc(1 - ty! where t is the tax rate, the government could increase the aggregate expenditure a) increasing the tax rate b) reducing the tax rate 20. If the marginal propensity to consume (mpc) increase, the Keynesian multiplier effect...
Assume that Miriam’s consumption function is C = a + b(Y d),
where Y d = (Y − T ) is disposable income, defined as the
difference between income Y and taxes T. You observed that, after
an increase in taxes T by $80, Miriam’s consumption C decreased by
$60. If Miriam’s income (Y ) did not change, you can deduce that
her marginal propensity to consume (MPC) is
23. Assume that Miriam's consumption function is C = a +b(yd),...
QUESTION TWO An economy is
represented by the following set of equations: Y = C + I C = 80m +
1.6Y where Y represents aggregate expenditure C represents
consumption expenditure by households I represents investment
expenditure by firms M is millions of Ghana cedis (a) (i) Explain
why the model is not an open economy? (2 marks) (ii) Explain
investment expenditure (I) as used in the model. (3 marks) (b)
Using the consumption function, estimate the autonomous
consumption; marginal...
Macroeconomics Assignment 2 1. The table shows disposable income and consumption expenditure in an economy. Use the table to work Problems A and B. Disposable Consumption income expenditure (Billions of dollars) 800 1,000 A. Calculate saving at each level of disposable income. Over what range of disposable income does consumption expenditure exceed disposable income? Calculate autonomous consumption expenditure. B. Calculate the marginal propensity to consume. At what level of disposable income will savings be zero? If expected future income increases,...
Assuming that the consumption function is C = 300 + 0.5Yd where Yd is disposable income and is equal to 500, autonomous consumption is equal to: 0 550 0 300 0 450 0 800
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