Consider the Keynesian cross. If output is greater than planned spending, then A) firms will raise...
Consider the Keynesian cross. If output is greater than planned spending, then
A) firms will raise production
B) GDP will fall as the market corrects itself over time
C) firms will likely hire new workers
D) economic investment will rise
Homework Answers
If output is greater than planned spending ,then firms will reduce production , i.e GDP will fall as the market corrects itself over time . Hence, option(B) is correct ,
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Consider the Keynesian cross. If output is greater than planned
spending, then
A) firms will raise...
Q2. In the Keynesian cross model, equilibrium in the economy is obtained where planned spending equals...
Q2. In the Keynesian cross model, equilibrium in the economy is obtained where planned spending equals actual spending. (a) Explain what planned spending and actual spending are (b) Graphically present the equilibrium condition of the economy in the Keynesian cross model. (c) Explain how the economy adjusts to equilibrium if the economy finds itself with a level of planned spending which is less than actual spending (3 marks) (d) Explain why an increase in government spending leads to a greater...
1) If Inventory investment is higher than firms planned, a) actual investment is greater than planned...
1) If Inventory investment is higher than firms planned, a) actual investment is greater than planned investment. b) actual investment is less than planned investment. c) actual investment must be negative. d) actual and planned investment are equal. Refer to the information provided in Figure 8.8 below to answer the questions that follow. Figure 8.8 2) Refer to Figure 8.8. The amount of planned investment decreases if the interest rate a) rises from 4% to 8%. b) remains at 8%....
Solve 1. 2. 3. 4. 5. 1 Keynesian Cross Assume that households' consumption function is given...
Solve 1. 2. 3. 4. 5.
1 Keynesian Cross Assume that households' consumption function is given by C(Y -T) 50+ 0.75(Y T), that firms' investment function is I(r) 150 10r, government spending is G 150, and the tax bill T 200. 1. What is the Marginal Propensity to Consume "MPC")? 2. What is the equilibrium level of real GDP in the goods market if the real interest rate is 5%? (Plug in r = 5 for 5%, rather than 0.05...
9. Suppose that consumption is given by And planned investment by firms is 415 (a) Suppose...
9. Suppose that consumption is given by And planned investment by firms is 415 (a) Suppose output is currently 1500. What will unplanned inventories be? Does this mean output (b) Depict the Keynesian Cross equilibrium graphically; calculate the equilibrium output in this c) Suppose there is an increase in autonomous consumption of 80. Find the new equilibrium level of will rise, or fall? What will happen to cause this change in output? 5 points economy. 5 points output the economy,...
A decrease in government spending reduces output more in the Keynesian Cross model than in the...
A decrease in government spending reduces output more in the Keynesian Cross model than in the IS‐LM model. Explain why this is true.
two questions thanks！ An unplanned decrease in inventories results in Select one: A. a decrease in...
two
questions thanks！
An unplanned decrease in inventories results in Select one: A. a decrease in planned investment. B. an increase in planned investment. C. actual investment that is less than planned investment D. actual investment that is greater than planned investment. x Which of the following explains the cause of the change in the unemployment rate at the end of a recession? Select one: a. Discouraged workers leave the labor force, and this makes the unemployment rate rise. b....
monovimo) O mona 5. If over any given period, domestic investment Spending is greater than total...
monovimo) O mona 5. If over any given period, domestic investment Spending is greater than total domestic savings then, it will be reasonable to expect that a. Net exports will be zero. b. Net exports will be positive. c. Net exports will be negative, d. Net exports may be either positive or negative. 6. List all of the following that are included in the definition of money that is most relevant to analysis of Federal Reserve monetary policy, that is...
[8] In Keynesian economics the most important factor determining whether the level of economic activity is...
[8] In Keynesian economics the most important factor determining whether the level of economic activity is growing or shrinking is: A) the multiplier effect. B) government expenditure and tax policies. C) the behavior of nonincome-determined spending. D) the relationship between leakages from and injections into the spending stream. [9] Using the Keynesian approach, if leakages from the spending stream are less than injections, the current level of output is: A) less than the equilibrium level of output, and will increase....
Question 1. Consider a closed economy to which the Keynesian-cross analysis applies. Consumption is given by...
Question 1. Consider a closed economy to which the Keynesian-cross analysis applies. Consumption is given by the equation C= 200 + 2/3(Y-T). Planned investment is 300, as are government spending and taxes. (18 points) a. If Y is 1,500, what is planned spending? Should equilibrium Y be higher or lower than 1,500? (4 points) b. What is equilibrium Y? (Hint: Substitute the values of equations for planned consumption, investment, and government spending into the equation Y C+I+ G and then...
1. If real GDP equals nominal GDP, then: A. the growth in output was greater than...
1. If real GDP equals nominal GDP, then: A. the growth in output was greater than the growth in the price level. B. there was no inflation. C. the current year is the base year. D. output did not grow. E. the growth in output was equal to the growth in the price level. 2. Nominal GDP is GDP measured in: A.base prices. B.fixed prices. C. current prices. D. marginal prices. E. average prices. 3. When you include discouraged workers...
Solve 1. 2. 3. 4. 5.
1 Keynesian Cross Assume that households' consumption function is given by C(Y -T) 50+ 0.75(Y T), that firms' investment function is I(r) 150 10r, government spending is G 150, and the tax bill T 200. 1. What is the Marginal Propensity to Consume "MPC")? 2. What is the equilibrium level of real GDP in the goods market if the real interest rate is 5%? (Plug in r = 5 for 5%, rather than 0.05...
9. Suppose that consumption is given by And planned investment by firms is 415 (a) Suppose output is currently 1500. What will unplanned inventories be? Does this mean output (b) Depict the Keynesian Cross equilibrium graphically; calculate the equilibrium output in this c) Suppose there is an increase in autonomous consumption of 80. Find the new equilibrium level of will rise, or fall? What will happen to cause this change in output? 5 points economy. 5 points output the economy,...
two
questions thanks！
An unplanned decrease in inventories results in Select one: A. a decrease in planned investment. B. an increase in planned investment. C. actual investment that is less than planned investment D. actual investment that is greater than planned investment. x Which of the following explains the cause of the change in the unemployment rate at the end of a recession? Select one: a. Discouraged workers leave the labor force, and this makes the unemployment rate rise. b....
monovimo) O mona 5. If over any given period, domestic investment Spending is greater than total domestic savings then, it will be reasonable to expect that a. Net exports will be zero. b. Net exports will be positive. c. Net exports will be negative, d. Net exports may be either positive or negative. 6. List all of the following that are included in the definition of money that is most relevant to analysis of Federal Reserve monetary policy, that is...
Question 1. Consider a closed economy to which the Keynesian-cross analysis applies. Consumption is given by the equation C= 200 + 2/3(Y-T). Planned investment is 300, as are government spending and taxes. (18 points) a. If Y is 1,500, what is planned spending? Should equilibrium Y be higher or lower than 1,500? (4 points) b. What is equilibrium Y? (Hint: Substitute the values of equations for planned consumption, investment, and government spending into the equation Y C+I+ G and then...
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