Assume the following, m1 = .15, i1 = .15, and c1 = .8. The increase in...
Assume the following, m1 = .15, i1 = .15, and c1 = .8. The increase in government expenditure of 4 would expect to increase national income by:
a) 20
b) 11.44
c) 16
d) 3.2
Homework Answers
Multiplier = 1/(1-.8+.15-.15) = 5
Increase in national income = 5*4= 20
a) 20 - is correct
Add Answer to:
Assume the following, m1 = .15, i1 = .15,
and c1 = .8. The increase in...
15. According to the Keynesian-cross analysis, if MPC stands for marginal propensity to consume, then a...
15. According to the Keynesian-cross analysis, if MPC stands for marginal propensity to consume, then a rise in taxes of ΔT will: A) decrease equilibrium income by ΔT. B) decrease equilibrium income by ΔT/(1 – MPC). C) decrease equilibrium income by (ΔT)(MPC)/(1 – MPC). D) not affect equilibrium income at all. 16. Assume that a country’s MPS is equal to 0.4 and government expenditure is lowered by $20 billion, what is the effect on the country’s Y? A) It will...
15. Calculate National Income and Private Income from the following data: R (in crores) 25 Items...
15. Calculate National Income and Private Income from the following data: R (in crores) 25 Items 1. Current transfers by government 18. 2. Net domestic product at factor cost accruing to the government 90 200 -50 3. Govt. final consumption expenditure 4. Net exports 5. National debt interest 6. Net domestic capital formation 7. Consumption of fixed capital 8. Net 60 100 30 factor income paid to abroad 20 600 9. Private final consumption expenditure 10. Net indirect tax 11....
1). Given a marginal propensity to consume = .8 (Ceteris paribus) and the government increases the...
1). Given a marginal propensity to consume = .8 (Ceteris paribus) and the government increases the level of transfer payments by $100, we should expect that the GDP will increase by a. $500. b. $80. c. $100. d. $400. 2). Suppose that actual GDP (Y) for France is 100 euros and: Consumption = 10 + .5Y Investment Spending = 5 Government Expenditure = 20 The Marginal Tax Rate (t) = .20 At these current levels, the size of the budget...
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....
ONLY 5-11 BELOW A5-10. Suppose the following aggregate expenditure model describes an economy: C = 100...
ONLY 5-11 BELOW A5-10. Suppose the following aggregate expenditure model describes an economy: C = 100 + (5/6)Yd T = (1/5)Y I = 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...
10. Open-market purchases of government bonds by the Fed will have the tendency to: A) Increase...
10. Open-market purchases of government bonds by the Fed will have the tendency to: A) Increase interest rates, the money supply, and national income. B) Increase interest rates and the money supply, but decrease national income. C) Increase interest rates, but decrease the money supply and national income. D) Decrease interest rates, but increase the money supply and national income. E) Decrease interest rates, the money supply, and national income. 11. Aggregate demand would tend to be shifted up by...
Assume we have a closed economy, the following information for the third quarter of 2020 (assume export = import = net export = 0):
Assume we have a closed economy, the following information for the third quarter of 2020 (assume export = import = net export = 0): • National income (excluding net export) = 517,536,000,000 SAR.• Consumption equal 222,526,000,000 SAR.• Government expenditures equal 140,199,000,000 SAR.Assume that the consumption tax rate is 15% (Value Added Tax) and 20% for capital (investment). Solve for the following if it is considered a closed economy:a- Tax revenue. there are two types of tax; sales tax (VAT) and capital...
At full employment, an increase in the quantity of money (ceteris paribus) can start Select one:...
At full employment, an increase in the quantity of money (ceteris paribus) can start Select one: a demand-pull inflation, as can an increase in government expenditure. b. demand-pull inflation, but an increase in government expenditure cannot. C. cost-push inflation, but an increase in government expenditure cannot. d. demand-pull and a cost-push inflation, as can an increase in government expenditure. e. cost-push inflation, as can an increase in government expenditure. Safari Touch ID moodle 31.upei.ca UPEI Accessdeck Old-Moodle English (en) Suppose...
QUESTION 12 In the aggregate expenditure model if the government of Pasedonia decides to increase government...
QUESTION 12 In the aggregate expenditure model if the government of Pasedonia decides to increase government spending by $ 100 billion and to finance this increase in government spending the government of Pasedonia increases taxes by $ 100 billion what effect will this have on the economy? (assume MPC=0.75) O A GDP stays the same OB GDP increases by $ 100 billion OC. GDP will increase by $ 400 billion D.GDP will decrease QUESTION 13 An example of an automatic...
Assume that a 4 percent increase in income in the economy produces an 8 percent increase in the quantity demanded of good X
6. Assume that a 4 percent increase in income in the economy produces an 8 percent increase in the quantity demanded of good X. The coefficient of income elasticity of demand is a. - 0.5 and therefore X is an inferior good. b. +2.0 and therefore X is an inferior good. c. +0.5 and therefore X is a normal good d. +2.0 and therefore X is a normal good 7. Suppose the price elasticity of demand for Reece's peanut butter cups is 1.5 and the...
15. Calculate National Income and Private Income from the following data: R (in crores) 25 Items 1. Current transfers by government 18. 2. Net domestic product at factor cost accruing to the government 90 200 -50 3. Govt. final consumption expenditure 4. Net exports 5. National debt interest 6. Net domestic capital formation 7. Consumption of fixed capital 8. Net 60 100 30 factor income paid to abroad 20 600 9. Private final consumption expenditure 10. Net indirect tax 11....
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....
10. Open-market purchases of government bonds by the Fed will have the tendency to: A) Increase interest rates, the money supply, and national income. B) Increase interest rates and the money supply, but decrease national income. C) Increase interest rates, but decrease the money supply and national income. D) Decrease interest rates, but increase the money supply and national income. E) Decrease interest rates, the money supply, and national income. 11. Aggregate demand would tend to be shifted up by...
At full employment, an increase in the quantity of money (ceteris paribus) can start Select one: a demand-pull inflation, as can an increase in government expenditure. b. demand-pull inflation, but an increase in government expenditure cannot. C. cost-push inflation, but an increase in government expenditure cannot. d. demand-pull and a cost-push inflation, as can an increase in government expenditure. e. cost-push inflation, as can an increase in government expenditure. Safari Touch ID moodle 31.upei.ca UPEI Accessdeck Old-Moodle English (en) Suppose...
QUESTION 12 In the aggregate expenditure model if the government of Pasedonia decides to increase government spending by $ 100 billion and to finance this increase in government spending the government of Pasedonia increases taxes by $ 100 billion what effect will this have on the economy? (assume MPC=0.75) O A GDP stays the same OB GDP increases by $ 100 billion OC. GDP will increase by $ 400 billion D.GDP will decrease QUESTION 13 An example of an automatic...
Most questions answered within 3 hours.
-
This assignment will explore the impact of corporate decisions
on a local versus a global perspective....
asked 3 minutes ago -
Most political philosophers believe we have a duty to obey laws,
even if the laws in...
asked 38 minutes ago -
Which of the following are common negotiation outcome
mistakes?
a. Leave money on the table b....
asked 52 minutes ago -
Propose an efficient synthesis of 2-Bromo-5-nitrotoluene from
benzene. Hint: 3 steps. Consider directing effects of substituents....
asked 59 minutes ago -
Convert the following quantities:
a) 0.819 atm to torr b) 512 mmHg to bar c) 11.2...
asked 1 hour ago -
C ++ Implement cat command
The purpose of this assignment is to provide practice using the...
asked 1 hour ago -
we
convert sugars into another form of stored potential energy. This
is called?
asked 2 hours ago -
The manufacturers of Oriental Spice Sauce are concerned that the
sodium levels in their product vary...
asked 2 hours ago -
PLEASE DON'T ANSWER IF YOU CAN'T ANSWER ALL OF THE QUESTIONS. I
DESPERATELY NEED HELP
Consider...
asked 2 hours ago -
DO NOT ANSWER IF YOU ARE UNSKILLED IN THIS AREA! TYPE OR WRITE
EACH ANSWER CLEARLY!!...
asked 2 hours ago -
how many moles of sodium are there in 3.41 moles of the
following compounds
NaCl
Na2SO4...
asked 2 hours ago -
1.1: Draw a position vs. time graph for a sprinter
running a 100 m dash. Label...
asked 2 hours ago