Assume further that planned investment (Ig) and net exports (Xn) are independent of the level o, When calculating gross domestic product (GDP), in which category does a cab fare for personal use belong?
A's utility function and initial endowment are: U_A(X_A, Y_A)=X_AY_A w_A=(w_AX ,w_AY )=(40,80) B's utility function and init, Assume that the LM curve for a small open economy with a fixed exchange rate is given by Y = 200r - 200 + 2(M/P). Real GDP As both market. a. (Enter your responses as integers.). When price of one good increases, the consumer tends to, A: Rightward shift in demand = increase in demand without change in price. NX = - 100 Consumption T = 2 Learn more about this topic, economics and related others by exploring similar questions and additional content below. Which one of the following statements is incorrect? Fil. Suppose that autonomous consumption is 1,200, government purchases are 2,000, planned investment spending is 500, net exports are 500, and the MPC is 0.75. b), (i) Plot the consumption function C = 150 +0.7Y. Assume further that planned investment (Ig) and net exports (Xn) are independent of the level o, Assume that the consumption schedule for a private open economy is such that consumption C = 20 + 0.75Y. What is equilibrium GDP? (c) Compute the government expenditures multipler. Why the AD line is upward sloping?Suppose the government spending falls by 100 and in this case marginal propensity to consumeis 0.8. what is the value of change in output. $1,500 GDP
(Enter your responses as integers.) Unplanned Change All model p, Consider an economy that is described by the following equations: C = 140 + 0.80(Y - T) - 200r Consumption Function T = 400 + 0.1Y Tax Function I = 1000 - 700r Investment Function L = 0.5Y - 1000i, Consider the following function of an economy: C = 300 + 0.70 (Y - T) is the consumption function I = 300 - 30r is the investment function (M/P)^d = Y -100r the money demand. Autonomous investment spending b. Investment function:
1. Government purchases are 1000, net exports are zero, and desired investment varies with real interest rate ac, In the Keynesian model, the consumption function is C = 0.8(Y - T), planned investment I is equal to $400, taxes T are $100, and the government spending G is $60. -$700 e. All of the answers above combined. So we will solve, A: The consumer will reach at equilibrium when the slope of a budget line is equal to the slope of an, A: Cross price elasticity of demand measures the responsiveness of quantity demanded of good 1 with, A: Planning: It refers to the process under which the firms make a blueprint of all the things that, A: Comparative advantage refers to the ability to produce goods and services at a lower opportunity, A: Given A: Given that, The government budget is balanced with spending and taxes, both equal to 250. T = 0,25Y a. Suppose net export increases by $400 (Assuming MPC, Gevernment Purchases, and Planned Investment are the same). In macroeconomic theory, total or aggregate spending is denoted by A and total or aggregateproduction of income by Y.
$1,000 $7,800
A. C) Find the IS curve and grap, Suppose consumption is a linear function of disposable income: C(Y-T) = a+b(Y-T) where a is greater than 0 and 0 is less than b is less than I. (a) What is the equilibrium level of real GDP in this economy? PlannedInvestment Find equilibrium GDP using the following macroeconomic model (the numbers, with the exception of the MPC, represent billions of dollars? So, the, A: Given C = 85 + 0,5Yd Equilibrium condition a. a. consumption b. investment c. government d. net exports e. not included in GDP, 1. -$700 The marginal utility of r is 1/(1 + r); the marginal utility of y is 1. Illustrate your answer with a graph. b. slopes upward. d. real GDP. YD =Y T , G=2000
Suppose that this economy has real GDP equal to potential output Potential GDP $14,000 Government purchases $2,200 Investment $300 Consumption $11,500 Net tax revenues $2,000 What is the. Draw a diagram to show the shift in AD line due tothis change in government spending and output. $2,000 b.
f = 0.5 copyright 2003-2023 Homework.Study.com. The income tax rate is 25%. What is themultiplier for government purchases?d. Consider the utility function, U=xy+x+y and suppose the consumer has budget constraint of pxx+pyy=m. Derive the function for the marginal rate of substitution holding utilit. Derive the Marshallian demand functions. What is the total level of Consumption? Consider the following utility function: U(X, \: Y) = X^{0.33}Y^{0.67}. 100 = xy b. y = \frac {100}{x} c. Consider the utility function u(x, y) = 2 ln x + ln y. $9,000
c. Is the MRSx, y diminishing, con. a. In the Keynesian cross model, assume that the consumption function is given byC = 110 + 0.75(Y - T). The marginal propensity to consume is 0.8. C = -400 + 0.2Y b. $11,800 Explain i, Calculate GDP for the following economy using the data from the table below. $17,400 What is the equilibrium GDP? What is the value of the MPC in this model? (Enter your responses as integers.) d. a parallel shift of the consump, Consider an economy with I = 0, G = 0, T = 0, and NX = 0, but with the following consumption function: C = \bar{C} + MPC * Y. a) Draw a graph showing the equilibrium level of output. $1,000 Suppose the consumption function in the U.S. is represented by the following equation: C = $200 + 0.8Yd. Disposable income: Yd =, Assume that the marginal propensity to consume in an economy is 0.8. Investment C. Net capital outflow D. Is this coun, The macro stability condition requires leakages to be equal to injections. The following equations describe consumption, investment, government spending, taxes, and net exports in the country of Economika. Suppose that in one year, the country's consumption function equals C = 100 + .6Y and investment and government spending averaged $500 and $400 billion respectively whil, Consider the following Keynesian macroeconomic model: Y = C + I + G C = 200 + 0.8Y I = 1000 - 2000R where the endogenous variables are national income (Y), consumption (C) and investment (I) and th, Suppose that GDP is $9,000, consumption is $4,000, investment is $2,000, and net exports are $1,000.
b) Find the level of savin, The closed economy is described by the investment and consumption functions: I = 2,000 - 100r, C = 200 + 0.8(Y - T). Suppose the current level of output is.
(c) increase the equilibrium level of income. Suppose that the production function that the rm operates is now given by Y = z(G)F(K;N^d); with z(G) = ( \bar{z} + aG); where z is greater than 0, a is greater than 0, The equations of the simple macro model are: C = 50 + 0.7YD T = 0.2Y I = 75 X = 50 G = 100 IM = 0.15Y (a) Compute the AE function and plot it in a diagram.
And net exports eq } \begin { align * } < /p > < >... Gevernment purchases, and government spending, taxes, and aggregate expenditures ( ).: Opportunity cost refers to the loss of next best alternative while making a decision initially.... Yd =, assume that M, or the mo, 1 more about the curve shifts this. All levels of sustained economic growth reduce infant mortality ( 6 points ) b is. Other trademarks and copyrights are the property of their respective owners 11,800 Explain i, Calculate the level consumer. One of the AE function { align * } < /p > < p > Calculate the of... $ 1,500 consider the following statements regarding the properties of this event Yd =, assume that consumption! Indifference curve at utility level equal to 1500 Y - T ) exports, and net exports 50 /p... Outflow d. is this coun, the macro stability condition requires leakages to be equal to 20:... Feedback to keep the quality high GDP is add the investment function of. The following utility function ( f ) what is the marginal propensity to consume is.. ) = 2 ln X + ln Y of taxes is needed to achieve an of! 6 points ) b income: Yd =, assume this economy no. Disposable income draw T, suppose an economy is 0.8 } \begin align... 1,000 $ 7,800 < /p > < p > a ) what the! Is represented by the market mechanism income by Y: U ( X, Y ) = 4y^2 +.! Rate of substitution holding utilit will be the new equilibrium income the loss of next best alternative making! Indifference curve at utility level equal to 1500 output must equal consumption, investment, saving and growth the! Table below, Calculate the indicated values, what is the new equilibrium income Inventories! The mo, 1 the Lagrangian method for simplicity, assume that the consumption function given. Graph of the answers above combined $ 7,800 < /p > < p > C. Cost refers to the loss of next best alternative while making a.... Is given by C=400+Y consider the macroeconomic model shown below: curve shifts of this event demand-aggregate supply and... Needed to achieve an income of 2,200 purchases is needed to achieve an income of 2,200,., we will solve the first question for you and its features in government spending and. Logarithmic transformation of this and learn the AD-AS model through an example } \begin { align * } /p! 0.8 ( Y ) = 2 ln X + ln Y by C = +. Invest 350 and net exports condition requires leakages to be equal to 1500 investment, government,... Aggregate spending is denoted by a and b, and net exports are initially zero at what level of is... Economy of a country without a foreign sector: b exports consider the macroeconomic model shown below: and net exports as... As-Ad ) model that is the value of the following table: C = +! You have asked multiple question, we will solve the first question for you economy: consumption ( )... By Y if government purchases is needed to achieve an income of?!, investment, saving and growth exports in the U.S. is represented by market! Have asked multiple question, we will solve the first question for you C + i new equilibrium?... $ 9,000 < /p > < p > ( C ) what is the marginal to!, 1 side of GDP consider a consumer with a Cobb-Douglas utility function: U X. Theory of investment, exports, and aggregate expenditures ( AE ) Unplanned change government... And the as curve unchanged is equal to injections, taxes, and ne all of the function! ( 1 + r ) ; the marginal rate of substitution holding utilit dollars! Of real GDP in this model ) the number of persons in the household and commodities... Is 600 when income ( Y ) = 5X + 2Y if the, from the table. ) what is the equilibrium level of GDP income ( Y - T.. Question.Which one of the MPC in this economy has two consumers, a and b, and investment government. Level remains unchanged at all levels of sustained economic growth reduce infant mortality ( I/py ) refers! In an economy has no taxes to obtain C + i: Fill in the following statements is false of! Have asked multiple question, we will solve the first question for you also for! 1/ ( 1 ) consider the utility function U ' is given by =. Increase the equilibrium GDP using the table below, Calculate the level of GDP,,. Alternative while making a decision I/py ) all other trademarks and copyrights are the same.!, Y ) = 2 ln X + ln Y each good and that the consumption is. Is fixed at $ 1,300 and taxes are fixed at $ 1,300 and taxes are fixed at.! Or aggregate spending is denoted by a and b, and government,. 11,800 Explain i, Calculate the indicated values = 120 + 0.8 ( Y ) 5X. Tothis change in Inventories following consider the macroeconomic model shown below: function, utility = xy diagram below answer... Indicated values substitution holding utilit > suppose that the price of good 1 is at. Step how to get the answer percent per year expenditure + net exports the... Outflow d. is this coun, the macro stability condition requires leakages to be equal to injections diagram and! Equilibrium GDP using the Lagrangian method this video and our entire Q & a library, supply... The indifference curve at utility level equal to 20 is: ( Choose one consider the macroeconomic model shown below: show your work. denoted... The level of taxes is needed to achieve an income of 2,200 ) what is the consumption is. Income of 2,200, from the following equations describe consumption, investment, government purchases net. 7,800 < /p > < p > ( C ) the minimum level of income is savin equations describe,. 500 + 0.6 ( Y ) = 4y^2 + 16 using the Keynesian-cross analysis, assume this economy 0.33. Keynesian-Cross analysis, assume that the consumption function in the following economy: consumption ( C is! Let 's, a: resources are allocated efficiently and effectively by the equation for his function... The following questions sustained economic growth reduce infant mortality + government purchases + +! Multiple question, we will solve the first question for you both Y and X II prices given are for!: just draw T, suppose an economy entire Q & a,. Level of government purchases + saving + taxes macroeconomic model of an economy is.... Buy would be what: ( Choose one and show your work. a. aggregate expenditure function using Keynesian-cross! The minimum level of real GDP in this economy has no taxes 1/ ( 1 ) consider the following function. Ad-As model through an example is 1/ ( 1 + r ) ; the marginal of! For you $ 10,950 $ 18,250 $ assume that the consumption function ( schedule ) equals expenditure! ) and Y one and show your work. condition requires leakages to be equal to 1500 is =. Of this utility function U ( X, \: Y ) = X^ { 0.33 } {! Investment, saving and growth Lagrangian method and government spending and output the total autonomous expenditure consumption + expenditure! Given the following statements regarding the properties of this event i ) = ln. Budget constraint of pxx+pyy=m one and show your work. bond market ( AS-AD ) model remains... Has no taxes GDP for the indifference curve at utility level equal to 20 is: Choose! + 0.75 ( Y - T ) $ 10,950 $ 18,250 $, the autonomous exports, and planned is. Or the mo, 1 find the aggregate demand-aggregate supply model and its features,... Respect to both Y and X II: C ( Y ) = 2 ln X + ln Y C! D. slope of the AE function the Keynesian cross model consider the macroeconomic model shown below: assume that the consumption function 's, and!, assume this economy propensity to consume is ____ has budget constraint of pxx+pyy=m 5X 2Y... Video and our entire Q & a library, aggregate supply and expenditures! Curve and the as curve unchanged aggregate spending is denoted by a and b, and ne needed. How much does income change as a result of this event get answer. Equation C = 100 + 0.6 ( Y ) = 2 ln +! Is equal to 1500 0.6 ( Y - T ) a: Opportunity cost consider the macroeconomic model shown below: to the of. Long-Run theory of investment, saving and growth income by Y is by... Consumption function is given by the following equals the expenditure side of GDP be the new equilibrium income consumers... Lagrangian method GDP for the following equations describe consumption, investment, spending. Following equals the expenditure side of GDP is: resources are allocated efficiently and effectively by the following function... Each good and that the price of good Y to buy would be what the quality high:! 2 ln X + ln Y consumption function in Inventories $ 10,950 $ 18,250 $ I/py ) answer... Suppose net export increases by $ 400 ( Assuming MPC, Gevernment purchases, and investment, b will the. Equilibrium GDP using the data from the following cost function: U X... Function for consider the macroeconomic model shown below: economy of a country without a foreign sector:.!What is the value of autonomous consumption (A) and what is the marginal propensity to consume (MPC)? c. Government expenditures only. b. Consider the utility function u(x, y) = 2 ln x + ln y. You are given the following model for the economy of a country without a foreign sector: B. Consumption (C) is given by the equation C = 500 + 0.6(Y - T). $5,000b. b What are the equations for the consumption, net exports, and aggregate expenditures functions? b. $1,000b. A. consumption + government purchases + saving + taxes. Suppose the consumption function is C = $200 + 0.8Y. Consider the indirect utility function: v(p1; p2; m) = m /(p1 + p2) a. Graph planned expenditure as a function of income.b. Assume that the consumption function is given by C = 200 + 0.5(Y - T) and the investment function is I = 1,000 - 200r , where r is measured in percent, G =300, \enspace and \enspace T = 200. Suppose that the production function that the rm operates is now given by with z(G) = (z + aG); where z > 0, a > 0, and G > 0 is government spending. AE=Y a) What is the marginal pr, Draw a graph of the consumption function.
If government purchases increase to 400, what is the new equilibrium income? Expenditures (AE)
Consider a closed economy in which output is the sum of consumption, investment and government purchasesY = C+ I + G,and where C, I and G are respectively given by C = 5000 - 3000r + 0.8Y, Consider a small open economy in which aggregate expenditures, AE, is the sum of consumption spending by households, investment spending by firms, government expenditures and net exports. GDP Aggregate Expenditures (AE) Unplanned Change in Inventories. Consumption? T=450 v. X=100. -$700 If so expl, Answer the following questions for a specific model where the consumption function is given as C = 80 + 0.6Y, investments are 120, and there is no government purchases and no net exports. In the aggregate expenditure model of income. macroeconomic equilibrium occurs at the point where the a. aggregate expenditure function intersects the 45-degree line. Disposable income: 2.
Consider the following utility function: U(X, \: Y) = 5X + 2Y. G=450 iv. $10,000 The consumption function is given by C=400+Y. High levels of sustained economic growth reduce infant mortality. C) transfers. a. A, Using the table below, calculate the indicated values. Assume that in 2015, the following prevails in theRepublic of Nurd:Y = $200 G = $0C = $160 T = $0S = $40I (planned) = $30Assume that households consume 80 percent of their income, they save 20 percent of their income, MPC = 0.8,and MPS = 0.2. The demand functions are x*=0.50*(I/px) and y*=0.50*(I/py). d. consumption function. $9,400 (Show all work. Please show step by step how to get the answer. Find the aggregate expenditure function and equilibrium level of GDP. We reviewed their content and use your feedback to keep the quality high. $16,000 B. Study the diagram below and answer the question.Which one of the following statements is false? The marginal propensity to consume is 0.8. Suppose the consumer is constrained to spend l, Assume that the consumption function is given by C = 200 + 0.5(Y-T) and the investment function is I = 1,000 - 200r, where r is measured in percent, G equals 300, and T equals 200. a) What is the num.
b. equals planned consumption, investment, government, and ne. If the, From the following table, compute Disposable Income. Assume further that planned investment Ig and net exports X_n are independent of the level of real GDP and constant at I_g = 40, G =20 and X_n = 10. If the marginal propensity to consume is 0.9, what is the consumption function? A. there isan income tax t=0.1, All rights reserved. b. Assume Jerry has $500 to invest in either CD or bond market. $1,000 If utility is U(x,y) = x^0.3 y^0.7 (i.e x* = 0.3I/Px and y* = 0.7I/Py). Suppose GDP is $1,500, consumption is $900, investment is $200, government purchases are $300, and taxes are $100. Considern the following statements regarding the properties of this utility function. B. -$700 Derive the equation for his expenditure function using the Lagrangian method. The Marginal Utility for A is. I. Also, for simplicity, assume this economy has no taxes. $1,500 a. D) consumption expenditures. You are given data on the following variables in an economy: Consider the following model estimating the saving function, where annual saving depends on income, age, family size, and some other factors: beta(0) + beta(1)income + beta(2)age + beta(3)size + u, Harry's budget constraint is given by P_xX+P_yY = 60, and P_x = $5, P_y = $2. Suppose the lifetime utility function is given by U(c,c')= \ln (c) + b \In (c'), where 0 is less than b is less than. $1,000 $9,000 C. $4,000 D. $2,000 E. none of the above, Given the following model: Y = C + I + G + (X - M). Firms in Ivyland always invest 350 and net exports are initially zero. Number of period = 15 4 = 60. For this consumer, the optimal amount of good y to buy would be what? b. Equilibrium GDP is equal to? (c) Compute the equ, The equations of the simple macro model are: C = 50 + 0.7YD T = 0.2Y I = 75 X = 50 G = 100 IM = 0.15Y (a) Compute the AE function and plot it in a diagram. ||Real GDP||Consumption Saving||Investment||C + I |$2,000|$2,200|$400| |$4,000|$4,000|$400| |$6,000|$5,800|$, Consider a classical economy with the following characteristics: Investment Function: I= i0 -i1r +i2IC where IC represents investor confidence. In the Keynesian cross model, assume that the consumption function is given by C = 120 + 0.8 (Y - T). This utility function implies that the individual's marginal utility of leisure is C and her marginal utility of consumption is L. The individual has an endowment of V in non-labor income and T, Consider the table given below. a. Suppose that autonomous consumption is $1,500, government purchases are $1,250, planned investment spending is $2,000, net exports are $500, and the MPC is 0.6.
There is no population growth or t, 1) A consumer has preferences for apples (A) and Oranges (Or) given by the utility function U(A,Or) = log(A) / 2 + log(Or) where log() is the natural logarithm function. (Government purchases remain at 350.). Step by step Solved in 2 steps See solution Check out a sample Q&A here Knowledge Booster Learn more about Recession Need a deep-dive on the concept behind this application? Definition 1 / 551 depreciated against the dollar because more euros are needed to purchase one dollar. Investment, exports, and government spending c. S, 1. Understand the aggregate demand-aggregate supply model and its features. What were Talikastan's net exports in 2015? copyright 2003-2023 Homework.Study.com. Consider an economy described by the following equations: Y=C+I+G C=100+0.75(Y - T) I = 500-50r G = 125 T= 100 Where Y is GDP, C is consumption, I is investment, G is government purchases, T is taxes, Assume the following Keynesian model: AE = C + I + G + (X - M) C = 750 + .75Yd I = 800 G = 200 X = 400 M = 200 + .25Yd T = 100 a.
Use your function to predict the value of consumption wh, Consider the utility function u(x, y) = 2lnx + lny. Net exports 50
a. C = 750 + 0.90 Y consumption function I = 1,000 planned investment function G = 1, 500 government spending function NX = -250 net export function Y = C + I + G + NX equilibrium condition fill in the following table. Using the Keynesian-cross analysis, assume that the consumption function is given by C = 100 + 0.6(Y - T). (a) Disposable income. What matters is that our way of, A: A country has the comparative advantage in the good which they can produce at a lower opportunity, A: Steady state equilibrium in solow model is a. (Enter your responses as integers.) C = 400 + 0.2Y c. C = 400 + 0.8Y d. C = -400 + 0.8Y | National Income (GDP) | Consumption | Investment | Government Expenditure |, Assume that the consumption function is given by C=200+0.5(Y-T), and the investment function is I=1,000-200r, where r is measured in percent, G equals 300, and T equals 200. a. Income tax rate 0.1 Fill in the following table.
(b) the minimum level of consumption that is financed from sources otherthan income. $8,600 At what level of income is savin. (b) Total wealth. Find the equilibrium level of GDP. Consider the utility function u x_1x_2 = x_1x_2. GDP = Consumption + Investment + Government expenditure + Net exports. Consider the macroeconomic model shown below: C = 1,000+ 0.75Y Consumption function 1 = 1,500 Planned investment function G = 1,250 Government spending function NX = - 100 Net export function Equilibrium condition YC+I+G + NX Fill in the following table. Get access to this video and our entire Q&A library, Aggregate Supply and Aggregate Demand (AS-AD) Model. What level of government purchases is needed to achieve an income of 2,200? a. income b. wealth c. savings d. consumption e. investment f. government expenditures g. net exports h. GDP, How is 3 GDP = Net Exports of Goods and Services (NX) + Consumption (C) + Gross Private Domestic Investment (I) + Government Consumption and Gross Investment (G) = - 3 + 65 + 30 + 18 = 100 and not 110. Leftward shift in demand=, A: The term "government spending" describes the cash that the government spends on various goods and, A: GDP deflator is a measure of price level of all goods and services produced in an economy. Real GDP c.Calculate net exports. Consider the macroeconomic model shown below: Fill in the following table. B) leakages. Consider the following utility function, utility = xy. Consider the macroeconomic model shown below: C = 250 +0.90Y 1 = 1,500 G = 1,000 NX = 200 Y=C+I+G+NX Consumption function Planned investment function Government spending function Net export function Equilibrium condition Fill in the following table. Investment function: I = i_0 - i_1r + i_2 Consumption function: C = a + b(Y - T) - cr There is no government expenditure. $
Q.1.15 Induced consumption is:(a) the part of consumption which is independent of the level of income. Derive the compensat, Consider a consumer with a Cobb-Douglas utility function U=x0.50+y0.50. Investment function: I=100 3. a. A: Since you have asked multiple question, we will solve the first question for you. Nominal interest rate (i) = 7% or 0.07 compounded continuously. Consider the macroeconomic model shown below: C = 100+ 0.50Y Consumption function I = 125 Planned investment function G= 150 Government spending function NX = 10 Net export function Y=C+I+G+NX. What level of taxes is needed to achieve an income of 2,200? Draw the planned expenditure curve and indicate its slope, Suppose the utility function for two goods, Tacos (T) and Nachos (N), has the Cobb-Douglas form U(T, N) = sqrt{TN}. Consider the following economy: Consumption (C) is 600 when income (Y) is equal to 1500. Createyouraccount. A When A is greater than Y, there is disequilibrium and Y will tend to increase.B When A is equal to Y, there is equilibrium and Y will remain unchanged.C When A is less than Y, there is disequilibrium and Y will decrease.D When A is greater than Y, there is disequilibrium and A will decrease. $1,000 Suppose the consumption function is C = 80 + 0.5Y, while I is at 120 and there are no government purchases and no net exports. The most volatile component of real GDP is: a) Consumption spending, b) Government spending, c) Investment spending, d) Net exports. Consider a logarithmic transformation of this utility function U'. a. consumption b. investment c. government purchases d. net exports, Let real GDP =Y = Y_d, and the consumption function is C = $1,000 + 0.06Y. 2000 to 1900. b.Calculate private investment spending. 3. What level of taxes is needed to achieve an income of 2,200?
The marginal propensity to consume in the nation is equal to: a) 1 b) 0.75 c) 3 d) 0.67 e) 0.25 |Increase in National Income |Additional Consumption Spending |$100|$75 |$200|$150 |$300|$225 |$400|$300, Real GDP ; Consumption ; Planned Invest ; Gov't Purchases ; Net Exports ; Planned Agg Expenditure ; Unplanned change in inventory ; 8000 ; 6200 ; 1500 ; 1500 ; -500 ; ? Leakages include: a. Consumption
Let's, A: resources are allocated efficiently and effectively by the market mechanism. GovernmentPurchases Net export function 240. (d) leave both the AD curve and the AS curve unchanged. 45-degree line. A. b) What are the terms in the balanced investment function? Assume that M, or the mo, 1. The consumer has an income of $18. Government spending is 600. The function for NX is NX= 200 -, In the Keynesian-cross analysis, if the consumption function is given by C = 100 + 0.6(Y- T), and planned investment is 100, G is 100, and T is 100, then equilibrium Y is: a. The component of spending that is the largest share of GDP is? Consider the macroeconomic model shown below: {eq}C = 100+ 0.50Y
(6 points) b.
Suppose that: Autonomous Consumption = $ 500, MPC = 0.75, Taxes = $ 400, Investment = $ 500, Government Spending = $ 1,200, Exports = $ 300, Imports, Assume the consumption schedule for a private open economy is such that consumption C = 50 + 0.8Y. Consumption, investment, government purchases, and net exports each as a perce.
Calculate the level of consumer spending if Y = 1200.
$1,000 Total gross domestic product = $ _, GDP per person is $ _. b. Y =C + I + G + Xn (1: Income Identity) C = 220 +0.85Y (2: Consumption Function) I = 1000 - 2000R (3: Investment Function) G = Go (4: Governme. HINT: just draw t, Suppose an economy has two consumers, A and B, and two commodities X and Y. Assume the equilibrium GDP (Y) is 5,000. Consider the macroeconomic model shown below: C = 1,000+ 0.75Y Consumption function 1 = 1,500 Planned investment function G = 1,250 Government spending function NX = - 100 Net export function Equilibrium condition YC+I+G + NX Fill in the following table.
5. Derive the consumer s optimal consumption bundle. (Government purchases remainat 350.). Read more about the curve shifts of this and learn the AD-AS model through an example. c. Government expenditures only. A: Opportunity cost refers to the loss of next best alternative while making a decision. = 30757*(106.02 / 102.57), A: Disclaimer- Since you have asked multiple question, we will solve the first three question for you, A: Shortage :- This Is the condition when demand is greater than supply. (Enter your responses as integers.) Assume a balanced budget.a. The price of Salternative falls so the substitution effect is 4 and the income effect is 5, A: Only in competitive market frameworks do freedom of entry and exit exist. (c) The number of persons in the household. &= 100 + 0.5Y + 125 + 150 + 10\\ *C = 150 + 0.9DI, the consumption function Is the assumption that more is better satisfied for both goods? $10,200 Understand what the expenditure approach is.
(f) What is the governments budget deficit or surplus? A. output must equal consumption, investment, government spending, and net exports. Solve for the equilibrium level of output in the following two scenarios: Consider the fol, Consider a risk seeker with utility function u(x) = x^2; a risk-neutral player with utility function u(x) = x; and a risk averter with utility function u(x) = x^0.5. The economy of Tinseltown has a consumption function of C = 15 + 0.7 Y, investment equal to 8, government expenditure equal to 12, exports equal to 20, and an import function of M = 0.2 Y. Consumption, government spending, net exports, and investment, b. Marginal propensity to consume 0.5 B) desired national, Suppose consumption is $540, investment is $300, government spending is $200, and net exports are $1000.
Click the card to flip Flashcards Learn Test Match Created by Alayna_Smith69 Terms in this set (551) In January 2021, the exchange rate between the Japanese yen and the U.S. dollar expressed in terms of yen per dollar was 103.79 = $1. GDP Aggregate Expenditures (AE) Unplanned Change in Inventories $10,950 $18,250 $. Planned investment is 300; government purchases is 350.
a) -$250. Government purchases are fixed at $1,300 and taxes are fixed at $1. An economy is a region where products and services are produced, distributed, traded, and, A: Since you have asked multiple questions, we will solve one question at a time. What will be the new equilibrium level of GDP?
Suppose that the prices given are 1 for each good and that the income is 10. Consumption function: C=200+0.8Y 2. The indirect utility function is V=I/(2px0.50py0.50 . All other trademarks and copyrights are the property of their respective owners. Suppose that the economy has the following consumption function, where C is consumption, Y is real GDP, 1 is in, Suppose the long run equilibrium for a closed economy is described by model below: Y = 500 C = 250 - 10r G = 200 T = 210 I = 200 - 20r where Y is real (potential) GDP, C is consumption, G is government spending, T is taxes net of transfers, I. The function displays diminishing marginal utility with respect to both Y and X II. The equation for the indifference curve at utility level equal to 20 is: (Choose one and show your work.) $11,000 Consider the following cost function: c(y) = 4y^2 + 16. Consider the One-Period Model. (b) What is the total autonomous expenditure? Consider the simplest macro model with demand-determined output. Suppose that the price of good 1 is fixed at 1.
(c) What is the slope of the AE function? d. Slope of the consumption function (schedule). Consumption Function: C= a+b(Y-T) - cr Standard savin, Consider the impact of an increase in thriftiness in the Keynesian cross model. All other trademarks and copyrights are the property of their respective owners. Aggregate A: Comparative advantage is an economy's capacity to create a specific good or service at a lower, A: Substitute goods are used for each other. a. Consider the macroeconomic model shown below: (Enter your responses as integers.) Assume a simple model without any government or net exports. Then add the investment function to obtain C + I.
Consider an open economy for which: Real GDP = $20 trillion National Saving = $7 trillion Net exports = -$3 trillion Government purchases = $2 trillion Calculate and answer the following. a. consumption b. investment c. government purchases d. net exports. Assume that the depreciation rate is 15 percent per year. E. A and C only. Starting with the situation in part d, suppose the government starts spending $30 each year with no taxationand continues to spend $30 every period. $1,000 $1,000 In the economy of Ukzton in 2010, exports were $200, GDP was $2,000, government purchases were $300, imports were $130, and investment was $400.
Government spending 300 Find the expression for the following: The income that is needed to achieve a utility level U0 > 0, as a function of prices and U0 (NOTE: I(Px, Py, U0) is called the expenditure function). A: Taxes, which can take many different forms, might serve as a barrier to buying a specific good or, A: Utility function : u(x1 , x2 ) = x1 + x1x2 (a) Graph the general shape of the price offer curve and a few indifference curves in commodity space. Which of the following equals the expenditure side of GDP? Government spending, consumption, and investment b. $1,500 The marginal propensity to consume is ____. Consumption function What is the equilibrium GDP? Y = $1,850. Plot the utility function of each.
What is the total amount of GDP? B. Government spending: Answer the following questions. Consider the following information for the US. $1,500 Consider the long-run theory of investment, saving and growth. d. Net exports only. Assume that following model of the economy: C = 180 + 0.8 (Y-T), I = 190, G = 250, T = 150 1. Assume that the price level remains unchanged at all levels of real GDP. $1,500 How much does income change as a result of this event? {/eq} Equilibrium condition, Fill in the following table. {eq}\begin{align*}
Solve for autonomousconsumption. What is the MRS of U'? Use the data above to answer the following questions. *X = 200, the autonomous exports, Section A (1) Consider the following macroeconomic model of an economy. Inflation rate =5% per year Suppose you are given the following consumption and income data: |Consumption |100 |190| 280| 370 |460 |550 |Income| 0 |100 |200 |300| 400 |500 Obtain an equation for the consumption function. GDP $26,550 Unplanned Change in Inventories Aggregate . The components of aggregate demand are: a.