Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G...
|
Income Or Output Y |
Consumption Expenditure C |
Investment Expenditure I |
Government Expenditure G |
Net export Expenditure NX |
|
$4,000 |
3,925 |
100 |
100 |
25 |
|
4,100 |
4,000 |
100 |
100 |
25 |
|
4,200 |
4,075 |
100 |
100 |
25 |
|
4,300 |
4,150 |
100 |
100 |
25 |
|
4,400 |
4,225 |
100 |
100 |
25 |
|
4,500 |
4,300 |
100 |
100 |
25 |
|
4,600 |
4,375 |
100 |
100 |
25 |
|
4,700 |
4,450 |
100 |
100 |
25 |
|
4,800 |
4,525 |
100 |
100 |
25 |
|
4,900 |
4,600 |
100 |
100 |
25 |
|
5,000 |
4,675 |
100 |
100 |
25 |
e) Suppose a tax cut of $50 is given with the information given in question1, what will be the new equilibrium level of income after the tax cut?
Homework Answers
Answer : Before tax cut the equilibrium level of income is, Y = 4,400.
Because, Y = C + I + G - NX
=> Y = 4,225 + 100 + 100 - 25
=> Y = 4,400.
Now, if tax cut is $50 then this increase the government expenditure (G) by $50. So, the government expenditure will be, G = $150. As a result,
Y = 4,225 + 100 +150 -25
=> Y = 4,450
Therefore, after tax cut the new equilibrium income level is Y = 4,450.
Add Answer to:
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G Net export Expenditure NX $4,000 3,925 100 100 25 4,100 4,000 100 100 25 4,200 4,075 100 100 25 4,300 4,150 100 100 25 4,400 4,225 100 100 25 4,500 4,300 100 100 25 4,600 4,375 100 100 25 4,700 4,450 100 100 25 4,800 4,525 100 100 25 4,900 4,600 100 100 25 5,000 4,675 100 100 25 a) Determine equilibrium level...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G Net export Expenditure NX $4,000 3,925 100 100 25 4,100 4,000 100 100 25 4,200 4,075 100 100 25 4,300 4,150 100 100 25 4,400 4,225 100 100 25 4,500 4,300 100 100 25 4,600 4,375 100 100 25 4,700 4,450 100 100 25 4,800 4,525 100 100 25 4,900 4,600 100 100 25 5,000 4,675 100 100 25 b) Calculate expenditure multiplier
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G Net export Expenditure NX $4,000 3,925 100 100 25 4,100 4,000 100 100 25 4,200 4,075 100 100 25 4,300 4,150 100 100 25 4,400 4,225 100 100 25 4,500 4,300 100 100 25 4,600 4,375 100 100 25 4,700 4,450 100 100 25 4,800 4,525 100 100 25 4,900 4,600 100 100 25 5,000 4,675 100 100 25 c) If government expenditure...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G Net export Expenditure NX $4,000 3,925 100 100 25 4,100 4,000 100 100 25 4,200 4,075 100 100 25 4,300 4,150 100 100 25 4,400 4,225 100 100 25 4,500 4,300 100 100 25 4,600 4,375 100 100 25 4,700 4,450 100 100 25 4,800 4,525 100 100 25 4,900 4,600 100 100 25 5,000 4,675 100 100 25 2. Calculate MPC, MPS...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G Net export Expenditure NX $4,000 3,925 100 100 25 4,100 4,000 100 100 25 4,200 4,075 100 100 25 4,300 4,150 100 100 25 4,400 4,225 100 100 25 4,500 4,300 100 100 25 4,600 4,375 100 100 25 4,700 4,450 100 100 25 4,800 4,525 100 100 25 4,900 4,600 100 100 25 5,000 4,675 100 100 25 3. Calculate GDP loss...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G Net export Expenditure NX $4,000 3,925 100 100 25 4,100 4,000 100 100 25 4,200 4,075 100 100 25 4,300 4,150 100 100 25 4,400 4,225 100 100 25 4,500 4,300 100 100 25 4,600 4,375 100 100 25 4,700 4,450 100 100 25 4,800 4,525 100 100 25 4,900 4,600 100 100 25 5,000 4,675 100 100 25 3. Calculate GDP loss...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G Net export Expenditure NX $4,000 3,925 100 100 25 4,100 4,000 100 100 25 4,200 4,075 100 100 25 4,300 4,150 100 100 25 4,400 4,225 100 100 25 4,500 4,300 100 100 25 4,600 4,375 100 100 25 4,700 4,450 100 100 25 4,800 4,525 100 100 25 4,900 4,600 100 100 25 5,000 4,675 100 100 25 3. Calculate GDP loss...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G...
Income Or Output Y Consumption Expenditure C Investment Expenditure I Government Expenditure G Net export Expenditure NX $4,000 3,925 100 100 25 4,100 4,000 100 100 25 4,200 4,075 100 100 25 4,300 4,150 100 100 25 4,400 4,225 100 100 25 4,500 4,300 100 100 25 4,600 4,375 100 100 25 4,700 4,450 100 100 25 4,800 4,525 100 100 25 4,900 4,600 100 100 25 5,000 4,675 100 100 25 a) Determine equilibrium level...
Table 20-2 GDP Domestic Expenditure Exports Imports Total Expenditures C + I + G + (X...
Table 20-2 GDP Domestic Expenditure Exports Imports Total Expenditures C + I + G + (X - IM) $650 650 650 $2,500 3,000 3,500 4,000 4,500 5,000 5,500 C+I+G $3,100 3,400 3,700 4,000 4,300 4,600 4,900 $250 300 350 400 450 500 In Table 20-2, what are net exports when GDP-3,500? O a. 400 PO b. 100 Doc.300 08.200
1. Aggregate expenditure and income The following table shows consumption (C), investment (I), government purchases (G),...
1. Aggregate expenditure and income The following table shows consumption (C), investment (I), government purchases (G), and net exports (X−IM) in a hypothetical economy for various levels of real GDP (Y). Assume that the price level remains unchanged at all levels of income. All figures are in billions of dollars. Compute total expenditure for each income level, and fill in the last column in the following table. Y C I G X−IM Total Expenditure 500 300 150 200 -100 600...
Table 20-2 GDP Domestic Expenditure Exports Imports Total Expenditures C + I + G + (X - IM) $650 650 650 $2,500 3,000 3,500 4,000 4,500 5,000 5,500 C+I+G $3,100 3,400 3,700 4,000 4,300 4,600 4,900 $250 300 350 400 450 500 In Table 20-2, what are net exports when GDP-3,500? O a. 400 PO b. 100 Doc.300 08.200
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