2. From what was learned in class, explain what the values of the slope and vertical intercept of the aggregate consumption function mean from an economic perspective. Income-expenditure equilibrium Using the data in the following table to complete the following questions. GDP YD C Planned (billions of dollars) $0 $0 $200 $100 400 400 500 100 800 800 800 100 1,200 1,200 1,100 100 1,600 1,600 1,400 100 2,000 2,000 1,700 100 2,500 2,500 2,000 100 3.000 3.000 2.300 100 1. Complete the columns for AEPlanned and unplanned in the table. AE Planned Unplanned GDP YD C AE $0 $0 $200 $100 $300 $400 $400 $500 $100 $600 $800 $800 $800 $100 $900 $1,200 $1,200 $1,100 $100 $1,200 $1,600 $1,600 $1,400 $100 $1,500 $2,000 $2,000 $1,700 $100 $1,800 $2,500 $2,500 $2,000 $100 $2,100 $3,000 $3,000 $2,300 $100 $2,400

2. From what was learned in class, explain what the values of the slope and vertical intercept of the aggregate consumption function mean from an economic perspective. Income-expenditure equilibrium Using the data in the following table to complete the following questions. GDP YD C Planned (billions of dollars) $0 $0 $200 $100 400 400 500 100 800 800 800 100 1,200 1,200 1,100 100 1,600 1,600 1,400 100 2,000 2,000 1,700 100 2,500 2,500 2,000 100 3.000 3.000 2.300 100 1. Complete the columns for AEPlanned and unplanned in the table. AE Planned Unplanned GDP YD C AE $0 $0 $200 $100 $300 $400 $400 $500 $100 $600 $800 $800 $800 $100 $900 $1,200 $1,200 $1,100 $100 $1,200 $1,600 $1,600 $1,400 $100 $1,500 $2,000 $2,000 $1,700 $100 $1,800 $2,500 $2,500 $2,000 $100 $2,100 $3,000 $3,000 $2,300 $100 $2,400

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section: Chapter Questions

Problem 2DQ

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2. From what was learned in class, explain what the values of the slope and vertical intercept of the aggregate consumption function mean from an economic perspective. Income-expenditure equilibrium Using the data in the following table to complete the following questions. GDP YD Planned (billions of dollars) $0 $0 $200 $100 400 400 500 100 800 800 800 100 1,200 1,200 1,100 100 1,600 1,600 1,400 100 2,000 2,000 1,700 100 2,500 2,500 2,000 100 3,000 3.000 2,300 100 1. Complete the columns for AEPlanned and unplanned in the table. 2. What is the value of the MPC? 3. What is the aggregate consumption function? AE Planned Unplanned 4. What is the equation for the planned aggregate expenditure function? 4. 5. What is the value of income-expenditure equilibrium GDP, (Y*)? 6. Explain in economic terms what happens when not in the income-expenditure equilibrium? Both when GDP > AE planned and GDP < AE planned. For each situation what needs to happen to move the economy toward equilibrium?.
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