You are given the following information on the macroeconomy: Consumption: 200 + 0.75Y Investment: 100 + 0.10Y Government Spending 500 Exports 100 Imports 50 + 0.25Y Compute the equilibrium level of income, the size of the multiplier, and the change in equilibrium income for an increase in autonomous consumption of $50 million

You are given the following information on the macroeconomy: Consumption: 200 + 0.75Y Investment: 100 + 0.10Y Government Spending 500 Exports 100 Imports 50 + 0.25Y Compute the equilibrium level of income, the size of the multiplier, and the change in equilibrium income for an increase in autonomous consumption of $50 million

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.B: The Multiplier With Variable Imports

Problem 3TY

See similar textbooks

Similar questions

15) Given the income and consumption data shown in the table below, what is the spending multiplier ?
Consider the following graph: Consumption 8,000 4,000 The slope is: 1.2 2.5 A 0.4 B 10,000 Disposable income indeterminate from this information 20,000
Explain the concept of the 100X Multiplier using the idea of diminishing marginal utility.
In an economy the change in income is $2300 and change in investment is $700 What will be the multiplier
The following is a hypothetical estimate of a demand curve for butter over the period 2001–10. Qa = 145 – 1.5P- 0.001Y+ 2P. Where Qa is the quantity of butter sold in grams per person per week; Pis the price of butter (in pence per kg, at 2000 prices); Yis the anmual disposable income per head (in £s at 2000 prices); Pa is the price of margarine (in pence per kg, at 2000 prices). (a) If P is 50 pence, Yis £20 000 and P is 40 pence, what is the estimated value of Qa? (b) If the price of butter went up by 6 pence per kilo, all other things equal, what would happen to the estimated demand for butter? (c) Going back to the original price of 50 pence, if the value of Y now rose to £22,000 what would happen to the estimated demand for butter? (d) What is the income elasticity of demand for butter according to your calculations in (c)? What sort of good is butter according to this result? (e) Again, going back to the original demand, if the price of margarine now rose by 10 pence what would…
You are an economic advisor to the government. Discuss your opinion . a) How COVID-19 pandemic will affect the consumption behavior as well as the investment done by the firms and household for the next two years? b) What are the actions or policies that the government can implement to face this situation? please answers with analysis and --graph (if possible)
please explain this dynamic multiplier graph that given
The accompanying graph represents the aggregate consumption function for the small island nation of Pineapple Paradise. The people of Pineapple Paradise expect their future 10,000 disposable income to increase. Use the graph to show an 9,000 increase in consumption expenditures. 8,000 7,000 What is the new level of aggregate autonomous consumer ,000 Aggregate Consumption Function spending? ,000 $2000 4,000 $4000 3,000 $1000 O $3000 2,000 1,000 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Disposable Income Çonsumer Spending,
Macmillan Learning (Table: Consumption and Savings) Based on the table, the marginal propensity to consume is propensity to consume Income Consumption Spending Saving $30,000 $30,000 $0 40,000 35,000 5,000 50,000 40,000 10,000 0.5; varies with the level of income $5,000; is $5,000 $10,000; is $35,000 2; varies with the level of income and the average
Question 3 of 16 Income and consumption changes for five people are shown in the table. Given this information, rank the marginal propensities to consume (MPC) for the five people from largest to smallest. Largest MPC Smallest MPC Answer Bank Bert Doug Eli Carter Al Name Income change Consumption change Al +$5,000+$5,000 +$3,000+$3,000 Bert +$2,500+$2,500 +$800+$800 Carter +$1,000+$1,000 +$800+$800 Doug −$2,500−$2,500 −$1,750−$1,750 Eli −$5,000−$5,000 −$2,000−$2,000
Based on the following information: C = 40 + 0.7Yd, T = Tg – R, I = 200, G = 350, Tg = 60, R = 40 calculate the equilibrium level of income (Ye). calculate the value of kG, kTg and kR, where k is the multiplier.. calculate the values of C, S and T at Ye level. calculate the new equilibrium level of income if I increases by 10 percent. if G increases to 550 units and it is fully funded by the rise in T, what is the impact on Ye? if Tg increases to 85 units and R increases to 50 units, what is the effect on the level of Ye? Given the following information. C = 600 + 0.8Yd , Yd = Y – T, Tg = 100, I= 200, R = 50, G = 350, X = 250 and M = 200 + 0.1Y. Calculate the equilibrium level of income (Ye). Show the equilibrium level of income by using diagrams of both aggregate expenditure-income (AE-Y) approach and injection-leakage approach, How much investment should be increased if the government wants to increase the national income by 2000? How much tax has to be reduced so that…
1.12 Study the following diagram and answer the question that follows. Expenditures (billions of dollars per year) > > 3500 3000 2500 2000 1500 1000 500 Figure 9.1 500 1000 1500 2000 2500 3000 3500 Income (billions of dollars per yazari At an income level of $2,000 billion, a) Consumption equals $1,500 billion. b) Saving equals $0. c) The MPC equals 0.80. d) There is dissaving. F 뉴 C connex