Homework Answers
19).
Here the autonomous consumption is independent of disposable income. Here “400” is independent of disposable income, => autonomous consumption “400”. So, the correct answer is “A”.
20).
The government budget is given by, => B = T-G = 200 – 160 = 40 > 0, => the government budget is in surplus, => the correct answer is “B”.
21).
The equilibrium condition is given by.
=> Y = C+I+G, => Y = 400 + 0.9*(Y-200) + 300 + 160, => Y = 860 + 0.9*(Y-200).
=> 0.1*Y = 860 - 180, => Y = 680/0.1 = 6,800, => Y = $6,800 > 0.
The correct option is “B”.
22).
The consumption function is “C = 400 + 0.9*Yd”.
=> dC = 0.9*dYd, => dC = 0.9*400 = 360, => dC = 360 > 0. So, as the disposable income increases by “$400” the consumption increases by “$360”. The correct answer is “E”.
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The following information applies to questions 19 - 24. Suppose we have the following information for the simple (fixed...
21. What is equilibrium income ($output), Ye? a. $10,400 b. $6,800 c. $3,500 d. $5,100 e....
21. What is equilibrium income ($output), Ye? a. $10,400 b. $6,800 c. $3,500 d. $5,100 e. none of the above. 22. If Y,(disposable income) increased by $400, C would a. increase by $380. b. increase by $436. c. decrease by $90. d. increase by $320. e. increase by $360. 23. If both G and T increase by $800, equilibrium Y would a. increase by $1,200. b. increase by $900. c. increase by $720. d. increase by $400. e. none of...
16. Consider the following income/expenditure diagram in the simple Keynesian model. C,1,G, S,T Y = C+S+T -C+1+G I...
16. Consider the following income/expenditure diagram in the simple Keynesian model. C,1,G, S,T Y = C+S+T -C+1+G If taxes, T. were decreased, then a. The Y-C+S+T line would shift to the left, and ye would decrease. b. the C+/+G line would shift downward, and y' would decrease. c. The Y-C+S+T line would shift to the right, and y' would increase. d. the C+I+G line would shift upward, and y' would increase. e. neither of the lines would shift, and y'...
Economic model is characterised by the following data: * Private consumption C = 800 + 0.9*DI...
Economic model is characterised by the following data:
* Private consumption C = 800 + 0.9*DI
* Gross investment Ig = 400
* Government spending G = 500
* Sum of Taxes T = 300
* Disposable income DI = Y – T
Calculate:
* Equilibrium level of income Y (Y= 14300)
* Private consumption at macroeconomic equilibrium C =
13400
Develop equation of saving and calculate amount of saving at
the point of macroeconomic equilibrium. S=. 600
Task 4....
Question 5: Equilibrium in the goods market Use the following information to answer the question(s) below....
Question 5: Equilibrium in the goods market Use the following information to answer the question(s) below. C=250+.75YD I = 250 1. Y to video Mosantoni vigou nomor G= 200 que vol 1) y lo s odabrow ni inte bus T= 200 (i.e. taxes are autonomous or exogenous) where C=Consumption spending; Yp=disposable income; I=investment spending; G- government spending: and T-taxes paid minus government transfers received by consumers. Remember that Yp=Y-T). (a) Determine the equilibrium level of output and the equilibrium level...
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...
a. Consider the hypothetical loanable funds market. The government increases its spending (G) by $400 through...
a. Consider the hypothetical loanable funds market. The
government increases its spending (G) by $400 through deficit
financing. What is the effect of this event on household
consumption assuming that disposable income remains unchanged?
It will increase by $100.
It will increase by $200.
It will decrease by $100.
It will decrease by $200.
None of the above.
b. Now, same information like a, (The government increases its
spending (G) by $400 through deficit financing), if the Treasury
Secretary convinces...
An open economy is described by the following system of macroeconomic equations, in which all macroeconomic...
An open economy is described by the following system of macroeconomic equations, in which all macroeconomic aggregate are measured in billions of Namibian dollars, N$: Y = C + I + G + X – M C = 10 + 0.8 Yd T = 10+ 0.2Y X = 80 I = 35 G = 15 TR = 10 – 0.05Y M = 22 + 0.1Y Where: Y is domestic income Yd is private disposable income C is...
80. Using your knowledge of the economy, answer the following 80a. Which statement correctly describes the...
80. Using your knowledge of the economy, answer the following 80a. Which statement correctly describes the effects of fiscal instruments/measures? a. Government spending increases aggregate expenditures; taxes increase disposable income, and hence consumption. b. Government spending increases aggregate expenditures; taxes reduce disposable income, and hence consumption. c. Government spending decreases aggregate expenditures; taxes increase disposable income, and hence consumption. 80b. An economy grows if: a. labor expands at a more rapid pace than capital. b. capital expands at a more...
MacroEconomics - Can someone ask these questions please. Thank you! For questions 6 to 9, use...
MacroEconomics - Can someone ask these questions please. Thank
you!
For questions 6 to 9, use the following information: where Yn denotes disposable income where i denotes interest rato where y denotes total income or production Consumption: C = 100 + 0.5Y)) Investment: 1 = 50 - 5001 Tax minus transfer: T = 200 Government spending: G = 500 Real money demand: M = Y - 40001 Real money supply: M = 1000 where P - 1 where P =...
21. What is equilibrium income ($output), Ye? a. $10,400 b. $6,800 c. $3,500 d. $5,100 e. none of the above. 22. If Y,(disposable income) increased by $400, C would a. increase by $380. b. increase by $436. c. decrease by $90. d. increase by $320. e. increase by $360. 23. If both G and T increase by $800, equilibrium Y would a. increase by $1,200. b. increase by $900. c. increase by $720. d. increase by $400. e. none of...
16. Consider the following income/expenditure diagram in the simple Keynesian model. C,1,G, S,T Y = C+S+T -C+1+G If taxes, T. were decreased, then a. The Y-C+S+T line would shift to the left, and ye would decrease. b. the C+/+G line would shift downward, and y' would decrease. c. The Y-C+S+T line would shift to the right, and y' would increase. d. the C+I+G line would shift upward, and y' would increase. e. neither of the lines would shift, and y'...
Economic model is characterised by the following data:
* Private consumption C = 800 + 0.9*DI
* Gross investment Ig = 400
* Government spending G = 500
* Sum of Taxes T = 300
* Disposable income DI = Y – T
Calculate:
* Equilibrium level of income Y (Y= 14300)
* Private consumption at macroeconomic equilibrium C =
13400
Develop equation of saving and calculate amount of saving at
the point of macroeconomic equilibrium. S=. 600
Task 4....
Question 5: Equilibrium in the goods market Use the following information to answer the question(s) below. C=250+.75YD I = 250 1. Y to video Mosantoni vigou nomor G= 200 que vol 1) y lo s odabrow ni inte bus T= 200 (i.e. taxes are autonomous or exogenous) where C=Consumption spending; Yp=disposable income; I=investment spending; G- government spending: and T-taxes paid minus government transfers received by consumers. Remember that Yp=Y-T). (a) Determine the equilibrium level of output and the equilibrium level...
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....
a. Consider the hypothetical loanable funds market. The
government increases its spending (G) by $400 through deficit
financing. What is the effect of this event on household
consumption assuming that disposable income remains unchanged?
It will increase by $100.
It will increase by $200.
It will decrease by $100.
It will decrease by $200.
None of the above.
b. Now, same information like a, (The government increases its
spending (G) by $400 through deficit financing), if the Treasury
Secretary convinces...
MacroEconomics - Can someone ask these questions please. Thank
you!
For questions 6 to 9, use the following information: where Yn denotes disposable income where i denotes interest rato where y denotes total income or production Consumption: C = 100 + 0.5Y)) Investment: 1 = 50 - 5001 Tax minus transfer: T = 200 Government spending: G = 500 Real money demand: M = Y - 40001 Real money supply: M = 1000 where P - 1 where P =...
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