The consumption function for a closed economy with no government sector is given by the equation: C = £200 million + 0.8 Y where Cis aggregate consumption and Y is national income. (i) Calculate the value of aggregate savings if the level of national income is £4000 million. (ii) Calculate the equilibrium level of national income if the level of planned investment is £600 million. (ii) Calculate the level of aggregate consumption at the equilibrium level of national income if the level of planned investment is £1000 million.
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- The consumption function for a closed economy with no government sector is given by the equation: C = £200 million + 0.8 Y where C is aggregate consumption and Y is national income. (i) Calculate the value of aggregate savings if the level of national income is £4000 million. Show all your workings. (ii) Calculate the equilibrium level of national income if the level of planned investment is £600 million. Show all your workings. (iii) Calculate the level of aggregate consumption at the equilibrium level of national income if the level of planned investment is £1000 million. Show all your workings. (iv) Calculate the change in national income if planned investment rose from £600 million to £800 million. Show all your workings.Sa = -5000 and mpc or c = 0.8 Formulate the consumption function & interpret the function. Formulate the savings function & interpret the function.Given the following on a closed economy.C = 40 + 0.8Yd C= consumptionI = 55 – 200r I= InvestmentG = 20 G = government spendingT = 20 T = TaxesYe = 400 Ye = National Incomer = rate of interest Determine the level of investment
- Suppose GDP in this country is $660 million. Enter the amount for government purchases. National Income Account Government Purchases (G) Taxes minus Transfer Payments (T) Consumption (C) Investment (I) Private Saving = Complete the following table by using national income accounting identities to calculate national saving. In preceding table. National Saving (S) = $ Public Saving = $ = $ Value (Millions of dollars) Complete the following table by using national income accounting identities to calculate private and public saving. In your calculations, use data from the initial table. million million million 195 300 210 calculations, use data from the Based on your calculations, the government is running a budgetIn a closed economy, subsistence consumption is 10 billions, households spend 60% of their net disposable income on leisure consumption, investment is constant at 40 billions, taxes are 20 billions, government spending is 20 billions and the gross domestic product is 145 billions. Assume that suppliers always respond to variations in demand, that it takes them 1 month to adjust to new demand levels and that they make adjustments once per month (if any). One day, the government increases its spending to 30 billions. After 2 months (at the end of the 2nd month), by how much has the gross domestic product increased? Select one: a. 16 b. 25. c. 32 d. 50Assume that total expenditure E comprises the sum of government consumption, G, household consumption, C, and investment, I. Assume a closed macroeconomic system, so that income equals expenditure Y=E. If we define household saving, SH, as SH=Y-T-C, where the cunsumption function is a fixed proportion of disposable income, C=c(Y-T), which of the following will be true? a. Higher government spending alongside unchanged taxation will lead to higher investment and higher household saving b. Higher government spending alongside unchanged taxation will have no effect on household saving or investment c. Higher government spending alongside unchanged taxation will lead to higher household saving d. Higher government spending alongside unchanged taxation will lead to lower household saving
- If Y = 500 TL, c = 80% and C0 = 30, what is the consumption expenditure?1. Saving and investment in the national income accounts The following table contains data for a hypothetical closed economy that uses the dollar as its currency. Suppose GDP in this country is $1,680 million. Enter the amount for government purchases. Value National Income Account (Millions of dollars) Government Purchases (G) Taxes minus Transfer Payments (T) 360 Consumption (C) 1,000 Investment (I) 280 Complete the following table by using national income accounting identities to calculate national saving. In your calculations, use data from the preceding table. W National Saving (S) million $Suppose GDP in this country is $1,680 million. Enter the amount for government purchases. Value National Income Account (Millions of dollars) Government Purchases (G) Taxes minus Transfer Payments (T) 360 Consumption (C) 1,000 Investment (I) 280 Complete the following table by using national income accounting identities to calculate national saving. In your calculations, use data from the preceding table. National Saving (S) = Complete the following table by using national income accounting identities to calculate private and public saving. In your calculations, use data from the initial table. Private Saving = million %3D Public Saving = million %3D Based on your calculations, the government is running a budget
- 2. Saving and investment in the national income accounts The following table contains data for a hypothetical closed economy that uses the dollar as its currency. Suppose GDP in this country is $470 million. Enter the amount for government purchases. National Income Account Government Purchases (G) Taxes minus Transfer Payments (T) Consumption (C) Investment (I) Value (Millions of dollars) $ 90 250 Complete the following table by using national income accounting identities to calculate national saving. In your calculations, use data from the preceding table. National Saving (S) million 120The economy of Ghana has a saving function S= - 100 +0.2Y, investment equal to 66, government expenditure equal to 50, export equal to 20 and an import function of M= 0.1Y. (a). What is the consumption function of the economy (b). What is the aggregate expenditure function of the economy?Suppose GDP in this country is $480 million. National Income Account Value (Millions of dollars) Government Purchases (GG) 150 Taxes minus Transfer Payments (TT) 180 Consumption (CC) 225 Investment (II) 105 Complete the following table by using national income accounting identities to calculate private and public saving. In your calculations, use data from the initial table. Private SavingPrivate Saving = (YTI, TG, YCT) = = ?million Public SavingPublic Saving = = (CT, TG, YCT, YTI) = = $million