Suppose an economy is described by the following equations: Y = C + I + G + X – M C = 14 + 0.60Yd I = 20 G = 20 X = 15 M = 5 +0.1Y T = 20 + 0.4Y Where Y is domestic income Yd is private disposable income C is aggregate consumption spending T is government tax revenue I is investment spending G is government spending E represents exports M represents imports of goods and services. (a) Find out the equilibrium value of income. (b) What is the value of export multiplier?
Q: Pick TWO answers. a. Wealth can be measured as a flow over time. b. Disposable income measures…
A: Wealth refers to the accumulated economic resources which can be measured in terms of real income.…
Q: Gross Domestic Product equals $1.2 trillion. If consumption equals $690 billion, investment equals…
A: Gross domestic product: Gross domestic product or GDP is an standard measure which includes the…
Q: Assume a closed economy where the level of I is 300, G=T=150 and the savings function is S= −30 +…
A: Since you have multiple questions, we will answer the first question and its first three sub-parts…
Q: Assume you are the Minister of Finance and Economic Planning for Ghana, in charge of Fiscal Policy.…
A: Let us firstly define the data provided - Saving rate = 20% , therefore , Consumption rate /MPC = 1…
Q: The table given below reports the value of real GDP and its components consumption (C), investment…
A: Real GDP is the money value of all final goods and services produced in an economy during a specific…
Q: Assume you are the Minister of Finance and Economic Planning for Ghana, in charge of Fiscal Policy.…
A: The fiscal stance of a government alludes to what its level of expenditure and tax collection means…
Q: Suppose that consumption is 70 million and disposable income is 350 and that the economy is…
A: A recessionary GDP gap refers to when natural GDP is higher than actual GDP. This implies actual GDP…
Q: ASSUME THAT A THREE SECTOR ECONOMY IN COUNTRY W. THE AMOUNT OF AUTONOMOUS CONSUMPTION IS RM 300…
A: Aggregate demand is given by the aggregate of consumption, investment, and government expenditure.
Q: Assuming you are the Minister of Finance and Economic Planning for Nigeria, in charge of Fiscal…
A: Given information MPS=0.20 Autonomous consumption=5000 Investment=7000 G=8000 T=2000 t=0.25…
Q: If C=20 I= 30 G=10 NX=-15 MPC=2/3 T= 30% T=0.3Y What is the equilibrium level of output Y for which…
A: The equilibrium real output and price are determined by the interaction of aggregate demand and…
Q: The level of equilibrium income, Y, = $_____(Enter response rounded two decimal places) The…
A:
Q: We use the following terminology in this part: aggregate income Y and disposable income Ya (= Y –T),…
A:
Q: Q3. In a simple economy, suppose that all income is either compensation of employees or profits.…
A: "GDP or Gross Domestic Product measures the market value of all the final goods and services…
Q: Use the following information on economy X to answer the questions below. Consumption function: C…
A: Given that, Consumption function: C = 250 + 0.8Y Investment spending: I = 150 Government spending:…
Q: Assume that, without taxes, the consumption schedule for an economy is as shown in the first two…
A: Please find the attached calculation below-
Q: Suppose an economy with the following characteristics. Y = Real GDP or national income T = Taxes =…
A: The Aggregate Expenditure in an economy is the sum of all household, business and government…
Q: Use the following equations for exercises 16–18. C = $100 + .8Y I = $200 G = $250 X = $100 – .2Y 16.…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Refer to the information provided in Table below to answer the question that follow. All Numbers are…
A: Aggregate expenditure = Consumption spending + Investment spending + Government spending
Q: Use the following equations for exercises 16–18. C = $100 + .8Y I - $200 G = $250 x = $100 – .2Y 16.…
A: The gross domestic product (GDP) is the standard measure of value-added produced during a certain…
Q: Assume you are the Minister of Finance and Economic Planning for Ghana, in charge of Fiscal Policy.…
A: Given information MPS=0.20 Autonomous consumption=5000 Investment=7000 G=8000 T=2000 t=0.25…
Q: Consider the following consumption function: C = 800 + 0.75 YD for the fictitious economy of…
A: A fiscal multiplier provides the constant value by which iteration occurs in the process of…
Q: Suppose a closed economy has an aggregate consumption function given by C = 50 + 0.75Yd and…
A: We all know that, the commodity market in a standard IS-LM framework looks like the following, Y =…
Q: Suppose we have the following consumption function in an economy C = 2000 + 0.9YD. How much…
A: Given: The consumption function in an economy is C = 2,000 + 0.9YD Output is = 1000 To Find: The…
Q: Equilibrium output is 1000, MPC is 1/2 and taxes are zero. Government spending is 20 and net exports…
A: The income equation is given as Y = C+I+G+NX Here consumption is 1/2*Y= MPC which is 1/2*1000= 500…
Q: We use the following terminology in this part: aggregate income Y and disposable income Ya (= Y –T),…
A: Given: The hypothetical economy where: To Find: Th expression for the investment-saving (IS) curve:
Q: Problem 1: You are given the following model for the economy of a country: Consumption function:…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: In the circular flow of income and expenditure model... O A. the level of Income for factors of…
A: The simplest form of Circular Flow Model consists two sectors, i.e., household sector and firm…
Q: Suppose governments increase spending for Social Security pensions. Explain why the increased…
A: Answer - Given in the question - Suppose governments increase spending for Social Security pensions…
Q: We use the following terminology in this part: aggregate income Y and disposable income Ya (= Y –T),…
A: The Investment-Savings (IS) curve shows the combination of various levels of interest rate and GDP…
Q: 29. Suppose that household consumption is $1,000, investment is $600, government spending is $300,…
A: Given that Household consumption expenditure =$1000 Investment expenditure =$600 Government…
Q: Depict graphically the aggregate expenditures model for a private closed economy. Now show a…
A: The decline in real GDP is greater than the decline in the aggregate expenditures schedule…
Q: Consider the case of a closed economy for which the following initial data are known: c=0.70, t=0.3;…
A: Introduction We have given data of a closed economy. c = 0.70 , t = 0.3 , government expenditure…
Q: Equations for C, I, G, and NX are given below. If the equilibrium level of GDP is $32,000, what will…
A: Y= $32000 C= 5000 + (MPC)Y I= 1500 G= 2000 NX= -500 Equilibrium level of output; Y= C+I+G+NX
Q: Refer to the information provided in Table below to answer the question that follow. Output (Income)…
A: Answer: Option D is correct Unplanned inventory refers to the change in the stock which has been…
Q: 1. Suppose an economy is represented by the following equations. Consumption function C = 100 +…
A: The equilibrium level of income arises when the actual output is equal to the planned aggregate…
Q: Questions number 6 to 10 are based on having an MPC equal to 0.8 and potential output is P800…
A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Suppose an economy is described by the following equations: Y = C + I + G + X – M C = 14 + 0.60Yd…
A:
Q: Suppose the consumption function is given by C(Y) = 50+0.5 (Y-T), where Y represents income and T…
A: "In a closed economy, macroeconomic equilibrium is attained at a point where total income (Y)…
Q: Suppose an economy is represented by the following equations. Consumption function…
A: Given: C = 300 + 0.8 YdI= 400G = 500Exports (EX) = 200Imports (IM) = 0.1 YdAutonomous taxes (T) =…
Q: Consumption function: C = 250 + 0.8Y Investment spending: I = 150 Government spending: G = 500…
A: Given that, Consumption function: C = 250 + 0.8Y Investment spending: I = 150 Government spending: G…
Q: We use the following terminology in this part: aggregate income Y and disposable income Ya (= Y –T),…
A: given: C(Yd) = 12+0.75(Y-T)I(r)=124-1×rG=120T=20%
Q: We use the following terminology in this part: aggregate income Y and disposable income Ya (= Y –T),…
A: Aggregate expenditure refers to the sum of all expenditures in an economy by the factors over a…
Q: Suppose the president is successful in passing a $10 billion tax increase. Assume that taxes are…
A: Tax multiplier is a fiscal multiplier which measures the multiples of change in gross domestic…
Q: Assume that the consumption function for the above economy is C = 1000 + .75Yd fill in the empty…
A: Understanding of the level of consumption, investment and government expenditure helps find the…
Q: Output and income are in equilibrium when planned expenditures C+1+X-IM are equal to national…
A: The aggregate expenditure is a gauge of national income. The present market value of all the…
Q: Describe the volatility of government spending and net exports relative to that of GDP and suggest…
A: The components of the GDP here, that is the government spending & the exports of goods &…
Q: Suppose the following table shows the components of aggregate expenditure for an economy when…
A: Disposable Income is defined as the amount of money which a household or an individual decides to…
Suppose an economy is described by the following equations:
Y = C + I + G + X – M
C = 14 + 0.60Yd
I = 20
G = 20
X = 15
M = 5 +0.1Y
T = 20 + 0.4Y
Where Y is domestic income Yd is private disposable income C is aggregate consumption spending T is government tax revenue I is investment spending G is government spending E represents exports M represents imports of goods and services.
(a) Find out the equilibrium value of income.
(b) What is the value of export multiplier?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Y=C0+C1(Y-T)+I+G, C0=100 dollars, C1=0.8 (1) Suppose that tax collection (t) increases as much as 200 dollars. What would be its effect on national income? (2) Suppose that government expenditure (G) and tax collection (T) increases as much as 200 dollars, respectively. What would be its effect on national income?Suppose you are given the following data for a particular economy (unit: Millions of Euros):Gross National Income mp (GNImp) =1650Investment (I) = 220(Iliq) Net investment = 210Private consumption(C) =1100Net External Income (NEI) = 0Net Indirect Taxes (NIT) = 231Public Spending (G) = 363 Calculate: a) Balance of Goods and Services or Net Exports (NX) and Amortizations/Depreciations (A). b) Net National Product at Base Prices (NNPbp) and Net Domestic Product at Base Prices (NDPbp)What is the relative importance of consumption spending (C) in aggreagte demand and some factors that affect it? What is the relative importance of investment spending (I) in aggreagte demand and some factors that affect it? What is the relative importance of government spending (G) in aggreagte demand and some factors that affect it? What is the relative importance of Net Export (NX) (Net Export = spending on exports (X) - imports (M)) in aggreagte demand and some factors that affect it?
- If we want to calculate total spending in the economy, then we will include all of the following except: O spending by firms on new capital equipment spending by households on newly built houses government spending on new goods and services tax revenue collected by the government21) Assume that with existing tax and spending laws, government spending exceeds government tax revenues. To cover the resulting shortfall, the government must: A) increase consumers' incomes. B) print more money. C) Borrow money in the financial markets. D) lower interest rates. 22) Gross Domestic Product (GDP) is defined as the market value of: A) all goods and services sold during the year by domestic and foreign producers. B) all final consumer goods produced during the year by domestic and foreign suppliers. C) all intermediate goods produced during the year by domestic and foreign suppliers. D) all final goods and services produced within the boundaries of an economy during the year by domestic and foreign-supplied resources. 23) In the equation GDP = C + I + G + F, in which F equals net export spending (i.e., total spending on exports minus total spending on imports), imports are subtracted from the other types of expenditures because: A)…National income accounting for a certain country in the year for 2020 is given in Table 2. Based on the table, answer the following questions. Amount in $ (million) 180 8,120 3,800 1,320 4,230 12,000 10,120 12,100 8,000 3,120 3,240 Items Net factor income Consumption expenditure Public investments Import Export Government expenditure Wages Interest, rent and profit Indirect taxes Subsidies Depreciation a) By using expenditure approach, calculate Gross Domestic Product (GDP) at market price. b) By using income approach, calculate Gross Domestic Product 9GDP) at market price. c) Based on your understanding on Gross Domestic Product (GDP), explain why do you think that GDP Ís important, and what is the limitation of GDP?
- Q3 In a simple macroeconomic model, the value of national income Y may be found by solving the system: G= 250 (government expenditure) T= 50 (taxation) I= 100 (planned investment) C = 0.75Yd + 150 (consumption) where disposable income Yd = Y – T. (a) Calculate the equilibrium level of national income. (b) Calculate the total increase in government expenditure and investment needed to increase the equilibrium level of national income by 20.This question has four parts. (its not a writing assignment, just asking for a numerical value or simple answer) 1.1. What is the US GDP for the first quarter and second quarter of 2020? What is the personal consumption expenditures for the first quarter and second quarter of 2020? Go to the website for the Bureau of Economic Analyses (BEA): https://www.bea.gov/ Section 1: Domestic Product and Income; Table 1.1.5 1.2. Use the information in Table 1 to analyze aggregate expenditures (AE) model below (Figure 1. Equilibrium in a Private Closed Economy). (table 1 and figure 1 are in the attachments) 1.3. Identify the mistake and explain why the graph of the aggregate expenditures line does not correctly illustrate the economy's equilibrium. 1.4. Create a graph for the aggregate expenditures (AE) model using the data from Table 1: A Private Closed Economy. Tips: Remember, the 45degree line (also known as the Keynesian Cross) is a tool that shows how differences in aggregate…2) The following data summarize the expenditures for the country of XYZ during 2003 in millions of alphabet, the currency of country XYZ. Gross Private Domestic Investment $300 Business Fixed Investment $200 Change in Inventories $100 Exports $200 Imports $200 Personal Consumption Expenditures $800 Government Consumption Expenditures and Gross Investment $500 Statistical Discrepancy $10 Depreciation Expenditures $50 Calculate net exports Calculate GDP Calculate national income Assume that the GDP deflator is 120 and calculate real GDP for 2003.
- (o) Calculate MPC, MPS and APC from the following data: Income (Y) Consumption 100 95 110 1041. (a) The following equations describe an economy: C-100+ 0.75Yd I-50-25r T-G-50 Where C is aggregate consumption, Y is disposable income, I is aggregate investment. I is taxes, G is government purchases and r is the rate of interest. Derive the IS curve for the economy. Show the area of excess demand and excess supply in the goods market. (b) Draw the graph and explain the derivation of IS curve. 2. (a) Given the following data about the monetary sector of the economy: Ma -0.4Y-80r M₁ - 1200 million Where, Ma is demand for money, Y is the level of income, r is the rate of interest and M, is the supply of money. Derive the equation for LM curve and give the economic interpretation of this curve. Show the excess demand and excess supply in the money market. (b) Draw the graph and explain the derivation of LM curve. 3. Consider the following economy: C-100+ 0.8Yd I-50-25, G-T-50 M' P -200 M₁-Y-25r 1. Calculate the IS and LM curves. 2. Calculate the equilibrium levels of output (national…2) GDP (Y) = $1,200, consumption (C) = 150, exports (X) = 50, investment (I) = 125. What is government spending (G)? (Assume M= 0) (Show your math calculation)