Homework Answers
Answer-18 Equilibrium level of real GDP, Y* = 3200
The equilibrium level of output is where AEplanned = Y*
Y= AE = 0.75Y + 800
Y* = 3200
Answer-19 Unplanned inventory investment = $550, Firms will have incentive to reduce output next period.
AE = Y + Unplanned inventory investment
0.75(1000) +800 = 1000 + Unplanned inventory investment
Unplanned inventory investment = 550
Firms will have incentive to reduce output next period.
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QUESTION 18 Suppose the equation of an economy's Aggregate Planned Expenditure function is AE - 75y + 800. What is...
Suppose the equation of an economy's Aggregate Planned Expenditure function is AE = 75y + 800....
Suppose the equation of an economy's Aggregate Planned Expenditure function is AE = 75y + 800. What is the value of the equilibrium level of real GDP (denoted Y*)? Y* = [x]
provide an explanation with a steps of the answer for each question please 1,600 Planned aggregate expenditure, AE...
provide an explanation with a steps of the answer for each
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1,600 Planned aggregate expenditure, AE (billions of dollars) OS 1,600 Aggregate output, Y billions of dollars) Figure 24.5 1) Refer to Figure 24.5. If the economy is in equilibrium and the government decreases spending by $200 billion, equilibrium aggregate output decreases to S billion. A) 1,400 B) 1,200 C) 1,000 D) 800 2) Refer to Figure 24.5. If the economy is in equilibrium and the government increases...
1. Suppose below diagram illustrates the aggregate expenditure function of an economy. a. What is the...
1. Suppose below diagram illustrates the aggregate expenditure function of an economy. a. What is the value of the equilibrium output in this economy? b. What is the value of the MPC according to the aggregate expenditure function? c. What is the value of the multiplier? d. What is the unplanned change in inventory when the real GDP is $15 billion? e. Suppose the economy is producing the macroeconomic equilibrium output level. If there is an increase in autonomous expenditure...
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Potential GDP 1,000 AE AE. 800 700 600 ΔΑΕ Aggregate Expenditure (dollars) 400 200 AY 45° 0 0 200 400 600 700 800 1,000 Real GDP (billions of constant dollars) 11. Given the following Consumption Function as C = 350 +0.75 (Y); and actual equilibrium real GDP as $700; and full-employment real GDP as $800. The amount of government spending necessary to close up such GDP gap is: $20 $32.50 $30 $25 $27.50
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c. For each level of actual aggregate expenditure, calculate unplanned inventory investment. Instructions: Enter numerical values into the table. Enter whole numbers only. If the value is negative, you must enter a minus sign. d. What is the equilibrium level of aggregate expenditure in this economy? Instructions: Enter a numerical value rounded to two decimal places as necessary. e. For each level of actual aggregate expenditure, label the future output tendency as "increase," "decrease," or "same" based on what you...
Based on the assumptions of the aggregate expenditure model, fill in the columns for planned investment,...
Based on the assumptions of the aggregate expenditure model,
fill in the columns for planned investment, government spending,
and net exports.
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Suppose the equation of an economy's Aggregate Planned Expenditure function is AE = 75y + 800. What is the value of the equilibrium level of real GDP (denoted Y*)? Y* = [x]
provide an explanation with a steps of the answer for each
question please
1,600 Planned aggregate expenditure, AE (billions of dollars) OS 1,600 Aggregate output, Y billions of dollars) Figure 24.5 1) Refer to Figure 24.5. If the economy is in equilibrium and the government decreases spending by $200 billion, equilibrium aggregate output decreases to S billion. A) 1,400 B) 1,200 C) 1,000 D) 800 2) Refer to Figure 24.5. If the economy is in equilibrium and the government increases...
1. Suppose below diagram illustrates the aggregate expenditure function of an economy. a. What is the value of the equilibrium output in this economy? b. What is the value of the MPC according to the aggregate expenditure function? c. What is the value of the multiplier? d. What is the unplanned change in inventory when the real GDP is $15 billion? e. Suppose the economy is producing the macroeconomic equilibrium output level. If there is an increase in autonomous expenditure...
Potential GDP 1,000 AE AE. 800 700 600 ΔΑΕ Aggregate Expenditure (dollars) 400 200 AY 45° 0 0 200 400 600 700 800 1,000 Real GDP (billions of constant dollars) 11. Given the following Consumption Function as C = 350 +0.75 (Y); and actual equilibrium real GDP as $700; and full-employment real GDP as $800. The amount of government spending necessary to close up such GDP gap is: $20 $32.50 $30 $25 $27.50
Potential GDP 1,000 AE, AE 800 700 600 - AAE Aggregate Expenditure (dollars) 400 200 AY 45° 0 0 200 400 600 700 800 1,000 Real GDP (billions of constant dollars) 16. Given the following Consumption Function as C = 350 +0.75 (Y); and actual equilibrium real GDP as $700; and full-employment real GDP as $800. The amount of taxes that need to be cut to close up such GDP gap is: $33.33 -$35.33 -$30.33 cannot be computed based on...
$10,0001 $8,000 Aggregate expenditure $6,000 Aggregate Expenditure $4,000 $2,000 $0 $0 $2,000 $4,000 $6,000 $8,000 $10,000 Real GDP (Y) 1. The premise of the Keynesian aggregate expenditure model is that the amount of goods and services produced, and therefore the level of employment, depends directly on the level of total expenditures Refer to the above graph and answer the following questions: a. For the GDP level of $5000, GDP (output from producers) is less than real domestic output desired by...
c. For each level of actual aggregate expenditure, calculate unplanned inventory investment. Instructions: Enter numerical values into the table. Enter whole numbers only. If the value is negative, you must enter a minus sign. d. What is the equilibrium level of aggregate expenditure in this economy? Instructions: Enter a numerical value rounded to two decimal places as necessary. e. For each level of actual aggregate expenditure, label the future output tendency as "increase," "decrease," or "same" based on what you...
Based on the assumptions of the aggregate expenditure model,
fill in the columns for planned investment, government spending,
and net exports.
Hwk 7 (Ch. 1): Opens 3/21, Due 3/28 6 8 Consider the data presented in the table: investment Actual aggregate expenditure or output (Y) (billions of S) Consumption (C) Planned investmentspending (6) Net exports (Nx) (billions of S) (billions of S) (billions of S) (billions of S) of s) points 399 476 558 630 618 718 eBook 910 Based...
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