Consider the economy described by the following equations:   C = 1,600 + 0.9 (Y – T) I p = 800 G = 1,600 NX = 200 T = 1,600 Y* = 29,000 a.  Complete the table shown below to find short-run equilibrium output. Consider possible values for short-run equilibrium output as they are given in the table below. Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers.   OutputY Planned aggregate expenditure (PAE) Y – PAE Y = PAE? 27,200       (Click to select)   Yes   No  27,400       (Click to select)   No   Yes  27,600       (Click to select)   No   Yes  27,800       (Click to select)   No   Yes  28,000       (Click to select)   No   Yes           b. Short-run level of equilibrium output:             c. What is the output gap for this economy?         Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. The actual unemployment rate should be rounded to two decimal places.        Output gap:    where Y* = 29,000

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Consider the economy described by the following equations:
 

C = 1,600 + 0.9 (Y – T)
I p = 800
G = 1,600
NX = 200
T = 1,600
Y* = 29,000


a.  Complete the table shown below to find short-run equilibrium output. Consider possible values for short-run equilibrium output as they are given in the table below.

Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers.

 

OutputY Planned aggregate expenditure (PAE) Y – PAE Y PAE?
27,200       (Click to select)   Yes   No 
27,400       (Click to select)   No   Yes 
27,600       (Click to select)   No   Yes 
27,800       (Click to select)   No   Yes 
28,000       (Click to select)   No   Yes 

        
b. Short-run level of equilibrium output:   
        
c. What is the output gap for this economy?
       
Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. The actual unemployment rate should be rounded to two decimal places.
      
Output gap:    where Y* = 29,000

If the natural rate of unemployment is 5 percent, what is the actual unemployment rate for this economy (use Okun’s law given Y* = 29,000).
    
Actual unemployment rate:    %

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