To assume that the structural model of an economy is given below : C = 100+0.75 Ya %D | = 200 %3D G = T = 100 TR = 50 where G is government expenditure on goods and services, T is lump sum tax and TR are transfer payments. (1) Find the equilibrium level of income. (2) Calculate Government expenditure multiplier and transfer payments multiplier. What is the difference between the two ?
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- levels of in come The equilibrium levels of income Y consumptiion C, disposable income Yo and a three- Sector macroeconomic model Satis.fy the Structural equatione taxation T, for %3D C + In t Go C=atbld (ocbel, a>o) Y-T TE tY + To o >o) ☺ Express Ax=d Ü Using Cramer's rule, find the equilibrium levels of consumption (^), dis poseble in come CYo and Taxation (Tr) this System ln the formconsider a simple Macroeconomic Model With the following equations: C=500 + 0.9 YD I=650 G=1000 T=0.3Y X=700 IM= 0.23Y a) calculate equilibrium national level of income b) calculate the governments budget balance at the equilibrium national level of income c) calaculate the countrys trade balance d) calculate the mulitplier for this economyc = 400 + .60yd I = 200 Ytarget = 1875 a. calculate equilibrium disposable income for the one and two sector models b. calcualte the multipler c. what levels of government spending would be necessary to achieve the target level of income?
- Assume that a three sector economy in country W the amount of autonomous consumption is RM 300 million with the proportion of increase in income that is spent on consumption is 0.5 an induced tax of 20% is amount of government spending is RM 150 million Requirements Caluclate the national income equilibriumIn the economy of Kwartengland, the following figures are given for economic activity which was undertaken in 2013. All the figures are million Ghana Cedis Consumption Expenditure = 1000 + 0.8 YD Investment Spending= 600 Government Expenditure = 2450 Personal Taxes= 100 Exports= 100 Imports= 150 1. Calculate the investment and tax multipliers 2. By how much should exports change if government wishes to increase real GDP by 1000?Exercise D24 Compare two policies: a tax cut on income or an increase in government spending on roads and bridges. What are both the short-term and long—term impacts of such policies on the economy?
- What is the relative importance of government spending (G) in aggreagte demand and some factors that affect it?Consider a closed economy. The profits of private corporations constitute a fraction ?of national income. These profits are subject to corporate tax and a fraction ? of the net profits is distributed to owners. The remaining profits are invested in theeconomy. To encourage investment, the government proposes to cut the corporation tax. The corporation tax is proportional and so is the regular tax but the rates are notnecessarily the same.Analyse the effects of the government proposal assuming that wages and pricesare flexible. Will there be any ambiguity about the results?Assume that the economy is now governed by a government and begins trading with other economies. The economy is described by the following set of equations. ?=1000+0.5⋅?d ID = 600 G=700 T=400 EX=0.1⋅Y IM=100+0.1⋅Y YD = Y - T Calculate the equilibrium level of output Y* a) 2857 b) 4000 c) 6274 d) 4400 Whats the government expenditure multiplier? Whats the tax multiplier? Whats the ba;anced budget multiplier?
- 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 diagramASSUME THAT A THREE SECTOR ECONOMY IN COUNTRY W. THE AMOUNT OF AUTONOMOUS CONSUMPTION IS RM 300 MILLION WITH PROPORTION OF AN INCREASE IN INCOME THAT IS SPENT ON CONSUMPTION IS 0.5. AN INDUCED TAX OF 20% IS IMPOSED BY THE COUNTRY. THE AMOUNT OF IS RM 250 MILLION AND THE AMOUNT OF GOVERNMENT SPENDING IS RM 150 MILLION. CALCULATE THE NATIONAL EQUILIBRIUM INCOME.please explain each question. 1. We assumeconstantMPC in our model. Is this assumption true in the real world? 2. What determines the proportion of bonds/money that the household keeps? 3. What effect an increase of government spending will have on the output equilibrium in the goods market? Explain using autonomous spending.