You are given the following data concerning Kadwan, a country located in the mountains: • Consumption function: C = 150 +0.70Y • Investment function: I=75 Aggregate expenditure function: AE = C +I Equilibrium: AE =Y The MPC in Kadwan is (Round your response to two decimal places.) The MPS in Kadwan is (Round your response to two decimal places.) The level of equilibrium income, Y, is currency-units. (Enter your response as an integer.)

You are given the following data concerning Kadwan, a country located in the mountains: • Consumption function: C = 150 +0.70Y • Investment function: I=75 Aggregate expenditure function: AE = C +I Equilibrium: AE =Y The MPC in Kadwan is (Round your response to two decimal places.) The MPS in Kadwan is (Round your response to two decimal places.) The level of equilibrium income, Y, is currency-units. (Enter your response as an integer.)

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.A: The Simple Algebra Of Income Determination And The Multiplier

Problem 5TY

See similar textbooks

Similar questions

Consider a small economy that is closed to trade, so that its net exports are zero. Suppose that the economy has the following consumption function, where C is consumption, Y is income (real GDP), IP is planned investment, G is government purchases, and T is taxes:C = $40 billion+0.5×(Y – T) Suppose G=$115 billion, IP=$50 billion, and T=$10 billion.Given the consumption function and the fact that, in a closed economy, planned expenditure can be calculated as Y=C+IP+G , the equilibrium income level is$ billion.Suppose that government purchases are increased by $100 billion. The new equilibrium level of income will be equal to$ billion.Based on the effect of the change in government purchases on equilibrium income, you can tell that this economy's multiplier is equal to_________?
Question 17 In early 2000, China was the fastest emerging economy in Asia. However, in recent years, China has indicated deteriorating growth beginning of 2020. Suppose consumption function for China is C = 250 +0.6(Y-T) and taxes are T = 15+0.05Y, meanwhile investment is 250, government outlays are 400, and net - export is 300. a) What is the multiplier value for China? b) Suppose China's investment has dropped to 200, government outlays received deduction from the budget by 25% and other components are ceteris paribus. Calculate the national equilibrium new national income equilibrium. c) From the changes that happened in (b) China has reaccelerated export and import activities. This sector has contributed another $100 for net-export, meanwhile other components are ceteris paribus. Calculate national income equilibrium using multiplier approaches.
You are given the following data concerning Kadwan, a country located in the mountains. • Consumption function: C = 125 +0.50Y • Investment function: I = 125 • Aggregate expenditure function: AE =C+I • Equilibrium: AE = Y Describe the graph of the consumption function and the aggregate expenditure function and then identify the equilibrium level of income. The consumption function has an intercept of and a slope equal to MPC = =. The AE line is found by adding I to C. AE is achieved at Y = C with a slope equal to the MPC and an intercept of Equilibrium is steeper than parallel to flatter than
Consider the imaginary small country of Kootenay. Assume that Kootenay is closed to trade, so that its net exports are equal to zero. Suppose that the economy is described by the following consumption function, where C is consumption, Y is income (real GDP), IP is planned investment, G is government purchases, and T is taxes: C = $40 billion+0.5×(Y – T) Suppose G=$115 billion, IP=$50 billion, and T=$10 billion. Given the consumption function and the fact that, in a closed economy, planned expenditure can be calculated as Y=C+IP+G, the equilibrium income level is billion. Suppose that government purchases are increased by $100 billion. The new equilibrium level of income will be equal to billion. Based on the effect of the change in government purchases on equilibrium income, you can tell that this economy's multiplier is equal to
In the Republic of Nurds, assume that in 2011 the following prevails:Y= $200 G= $0 C= $160 T= $0 S= $40 I (planned) = $30Assume that households consume 80 percent of their income, they save 20 percent of their income, MPC =0.8. That is C =0.8Yd. What is Nurd’s equilibrium level of income?
Calculate the values for government purchases (G), private domestic saving (S), and private domestic investment (I) from the following information (all variables are in billions of dollars). 1. - . 5,200 YD = 4,400 C = 4,100 budget deficit trade surplus (NX) national income Y BD = 150 disposable income consumption TD = 110
In the Republic of Nurds, assume that in 2011 the following prevails:Y= $200 G= $0 C= $160 T= $0 S= $40 I (planned) = $30Assume that households consume 80 percent of their income, they save 20 percent of their income, MPC =0.8. That is C =0.8Yd. Is the economy of Nurd in equilibrium?
The following are exogenous (not directly affected by income): G = 9 I = 14 X = M = 0 The consumption function is: C = k + cY, where k = 8, c = 0.6 What is the equilibrium level of GDP? State to ONE decimal place What is the multiplier for this economy? The following are exogenous (not directly affected by income): G = 11 I = 4 X = M = 0 The consumption function is: C = k + cY, where k = 3, c = 0.8 What is the equilibrium level of GDP? What is the multiplier? Same information as in the previous question: The following are exogenous (not directly affected by income): G = 11 I = 4 X = M = 0 The consumption function is: C = k + cY, where k = 3, c = 0.8 Imagine the maximum potential output or real GDP of this economy is 100. Assume that is the same as saying we reach the edge of the PPF at 100. Now assume we want to get that economy from the current level of GDP to its maximum potential of 100. We can do this in two ways - either increase government spending (G) or reduce taxes, (we…
Problem 1: You are given the following model for the economy of a country: Consumption function: C=2000+0,75-YDI Investment function: I=10500 Government spending: G = 12000 Tax function: T=200+0,4·Y - Disposable income: YD = Y -T+TR Transfer: 1000 a) What is the level of equilibrium output? b) What is the new equilibrium output if investment decreases by 2 000 units? c) How much does the government collect in taxes when the economy is in equilibrium? d) What is level of the government’s budget? e) Calculate the tax multiplier? f) Calculate consumption at the equilibrium output.
Assume an economy where spending for each sector is: Household: C = 800 + 0.95Q Business: I = 3000 Public: G = 4000, Tr = 7000, Tx = 1000 + 0.3Q Foreign: X = 1700, Im = 200 + 0.165Q Solve for Consumption Expenditure, Household Savings, Imports https://www.bartleby.com/questions-and-answers/assume-an-economy-where-spending-for-each-sector-is-household-c-800-0.95q-business-i-3000-public-g-4/849c5d9a-4bb7-48c4-8b89-ccc576cdc909
You are given the following data concerning Freedonia, a legendary country: • Consumption function: C = 200+ 0.60Y • Investment function: I = 300 ● Aggregate expenditure function: AE = C +1 Equilibrium: AE = Y The MPC in Freedonia is 0.60. (Round your response to two decimal places.) The MPS in Freedonia is 0.40. (Round your response to two decimal places.) The level of equilibrium income, Y, is $ (Enter your response as an integer.) .
6. You are given the following data concerning Freedonia, a leg- endary country: (1) Consumption function: C = 200 + 0.8Y (2) Investment function: I = 100 (3) AE = C + I (4) AE = Y a. What is the marginal propensity to consume in Freedonia, and what is the marginal propensity to save? b. Graph equations (3) and (4) and solve for equilibrium income. C. Suppose equation (2) is changed to (2´) I = 110. What is the new equilibrium level of income? By how much does the $10 increase in planned investment change equilibrium income? What is the value of the multiplier?