An economy is described by the following equations: C = 80+0.9 (Y-7) IP G = 150 NX = 30 T = 180 Y* = 1,800 The multiplier in this economy is 10. a. Find a numerical equation relating planned aggregate expenditure to outpu Instructions: Enter your response for mpc rounded to one decimal place. PAE = + Y = 100 b. Construct a table to find the value of short-run equilibrium output. Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Output Planned aggregate expenditure Y (PAE) 1,780 1,880 1,980 2,080 2,180 Y- PAE Short-run equilibrium output is. c. By how much would government purchases have to change in order to eliminate any output gap? By how much would taxes have to change? In order to eliminate any output gap, government purchases would have to be (Click to select) reduced increased by . In order to eliminate any output gap, taxes would have to be (Click to select) increased reduced by . d. If y* = 2,070, then by how much would government purchases have to change in order to eliminate any output gap? By how much would taxes have change? In order to eliminate any output gap, government purchases would have to be (Click to select) reduced increased by . In order to eliminate any output gap, taxes would have to be (Click to select) increased reduced by
An economy is described by the following equations: C = 80+0.9 (Y-7) IP G = 150 NX = 30 T = 180 Y* = 1,800 The multiplier in this economy is 10. a. Find a numerical equation relating planned aggregate expenditure to outpu Instructions: Enter your response for mpc rounded to one decimal place. PAE = + Y = 100 b. Construct a table to find the value of short-run equilibrium output. Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Output Planned aggregate expenditure Y (PAE) 1,780 1,880 1,980 2,080 2,180 Y- PAE Short-run equilibrium output is. c. By how much would government purchases have to change in order to eliminate any output gap? By how much would taxes have to change? In order to eliminate any output gap, government purchases would have to be (Click to select) reduced increased by . In order to eliminate any output gap, taxes would have to be (Click to select) increased reduced by . d. If y* = 2,070, then by how much would government purchases have to change in order to eliminate any output gap? By how much would taxes have change? In order to eliminate any output gap, government purchases would have to be (Click to select) reduced increased by . In order to eliminate any output gap, taxes would have to be (Click to select) increased reduced by
Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?
Section: Chapter Questions
Problem 7TY
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 6 steps with 14 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning