Answer the following questions based on the below graph AE 5000 2000 45 5000 TP Investment I: $400 Government G: $300 AE Taxes T: Net Export NX: $0 $100 a- Graphically determine the equilibrium level of output. b- Derive the consumption and saving functions. c- Mathematically solve for the equilibrium level of income. d- When the economy is at full employment the output level is $5500. How much would government purchases change to create full employment?
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- Explain how to derive a total expenditures (TE) curve.You are given the following information about a closed economy with no government:Consumption = 115 + 0.6YInvestment = 550Use the above information to answer the questions that follow:Q.4.1 Calculate the value of autonomous spending. (3)Q.4.2 Calculate the value of the multiplier. (3)Q.4.3 Calculate the equilibrium level of income. (3)Q.4.4 Is the equilibrium level of income also the full employment level of income? Explainyour answer.(3)Q.4.5 Identify any three non‐income determinants of consumption. (3)Question 17 – Question 20: In this question, interest rate and prices are held fixed, and the economy can be described by the income-expenditure model. Consumption: C = 190 + 0.8YD; where YD = disposable income Investment: I = 180 – 50i, where i = 0.1 (10% & it is held fixed) Government spending: G = 183 Taxes: T = 272 Transfers: TR = 57 Exports: X = 18 Imports: IM = 24 Question 17 If the current level of output is 1975, find the levels of national savings and unplanned investment. Be sure to show your work rounded your answer to 2 decimal places if necessary
- You are given the following information about a closed economy with no government:Consumption = 115 + 0.6YInvestment = 550Use the above information to answer the questions that follow: Q.4.1 Calculate the value of autonomous spending. Q.4.2 Calculate the value of the multiplier. Q.4.3 Calculate the equilibrium level of income. Q.4.4 Is the equilibrium level of income also the full employment level of income? Explain your answer. Q.4.5 Identify any three non‐income determinants of consumption.Consumption function: C = 85 + 0,5Yd Investment function: I = 75 Government spending: G = 70 Net Taxes: T = 0,25Y Disposable income: Yd Y – T Equilibrium: Y = C + I + G You are given the following model for the economy of a country without a foreign sector: (d) Solve for equilibrium income. (Hint: Be very careful in your calculations. They are not difficult, but it is easy to make careless mistakes that produce dramatically wrong results.) (e) How much does the government collect in taxes when the economy is in equilibrium? (f) What is the government’s budget deficit or surplus?Q8. For the data in the following table, the consumption function is C = 800 + 0.6(Y – T). Fill in the columns in the table and identify the equilibrium output. Output Net Taxes Disposable Income Consumption Saving Planned Investment Government Expenditure Planned AE Unplanned Inventory change 2100 100 300 400 2600 3100 3600 4100 4600 5100
- You are given the following information about a closed economy with no government:Consumption = 115 + 0.6YInvestment = 550Use the above information to answer the questions that follow:Q.4.3 Calculate the equilibrium level of income. (3)arrow_forward Question Asked Aug 18, 2020 25 views Consider the following model of an economy operating with fixed wages, prices and interest rates and hasexcess capacity. Adsume all figures are I Zambian kwacha. C=100+0.8yd, T=100+25Y, G=980 and I= 500 Where c is consumption, yd is disposable income, T is taxes net of transformers, G is government spending on goods and services and I is investments. Is the government running a surplus or deficit Show the impact of a reduction in government spending by 80 on the equilibrium level of national income Illustrate your new equilibrium in the same Keynesian cross diagramGiven the following information: C = Ca + 0.8Yd Ip = 1900 - 40r G = 1800 NX = 700 - 0.14Y T = 200 + 0.20 Y Ca = 260 - 10r Md/P = 0.25Y - 25r Ms/P = 2000 Find: 1. The equilibrium level of interest rate and output. 2. If Government expenditure increased by 100, find the new equilibrium level of interest rate and output
- Silesia You are provided with the following information about an imaginary economy called Silesia. Use the information provided in the table to answer the questions below. Government expenditure 400 Exports 250 Autonomous imports 50 Autonomous consumption 150 Investment Expenditure 300 Full-employment output 2040 Marginal propensity to consume 0.75 Marginal propensity to import 0.15 Source: Bester, N. 2017. Tax rate 0.25 5.1 Derive and calculate the consumption function for the data provided. Show all formulas and calculations used. 5.2 Calculate autonomous spending. Show all formulas and calculations used 5.3 Calculate the multiplier. Show all formulas and calculations used. Round off your final answer to 1 decimal.For the next three questions, consider a closed economy with the following information: Economic investment = $6000 Private savings = $4100 Output (income) = $20,000 Consumption = $11,000 This economy has no transfer payments; in other words, total taxes and "net taxes" are the same thing. calculate this economy's government purchases (G). calculate this economy's public savings. calculate this economy's taxes (T). Note that there are no transfer payments.