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- 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?The table below provides Income and consumption Data in billions of dollars. Answer questions below based on it.Disposable Consumption SavingsIncome100 80 --------200 150 --------- What is the level of consumption when income is $300 billion? Group of answer choices $200 billion $240 billion $210 billion $60 billionWhich of the following components makes up the largest percentage of GDP measured by aggregate spending? O imports O government purchases of goods and services consumer spending investment spending О ехрorts
- 11:04 AM ECON 122 CAT ONE.docX Phoenix Files QUESTION ONE Is it desirable for a country to have a large gross domestic product? Explain (2 marks) QUESTION TWO You are given data on the following variables in an economy Government spending 300 Planned investment Net exports Autonomous taxes Income tax rate Marginal propensity to consume 0.5 a) Consumption (C) is 600 when income (Y) is equal to 1500. Solve for autonom ous consumption (2 ma rks) ii) 200 S 50 b) Solve for the equilibrium level of output in the following two scenarios: i) There is an income tax t=0.1, Edit 0.1 250 Q Search © | 46| 472 [ 66 c) In the economy with an income tax of 10%, what is the budget balance of the government? (2 marks) O X: × There is no income tax in the economy. Denote these two variables by Yw and YN respectively. (4 marks) d) Solve for the change in net exports that would bring the equilibrium output lev el in the economy with the income tax to the level of YN that you found in part b. specify both…National Income DeterminationThe following figures are from data on Good Island EconomyItems $mNet private investment 940Depreciation 56Compensation of employees 2 256Corporate taxes 416Personal taxes 756Personal Consumption expenditure 4 386Government purchases 3 182Indirect business taxes minus subsidies 482Payment of factor income to the rest of the world 95Corporate profits minus dividends 56Government transfer payments and interest 243Exports 855Receipts of factor income from abroad 186Imports of goods and services 385Social insurance payments 332 Required: Use the above information to answer the followingi.) Calculate for Good Island:a. Gross private investment b. Gross Domestic product c. Gross National Product d. Net National Product e. National income f. Personal Income g. Disposable Personal Income. Let the national income model be; Y = C + I0 + G , C = a + b ( Y – T) , G = g Y Identify endogenous variables Find the equilibrium national income Find equilibrium consumption(using static equilibrium & matrix algebra both)
- O Use the information in the following table to do exercises 8-15: 948 Y C $120 $300 $480 $700 sin $660 $100 $300 $500 JAZI I $20 $20 $20 $20 G $30 $30 $30 $30 X $10 -$10 -$30 -$50 1Table 2 shows elements in the national income accounts of an economy. Assume the economy is currently in equilibrium. elements billions Consumption (total) 80 Investment 9 Government Expenditure. 6 Imports 15 Exports 8 C) If national income now rises by £22 billion and as a result, the consumption of domestically produced goods rises to £80 billion. Calculate the marginal propensity to consume (MPC). D) What is the value of the multiplier? E) Comment on the results in part (c) and (d).Suppose you have the following disposable income and consumption data for a country, as shown in the table below Disposable income and Consumption BENp e e (dllar 13,000 227,000 3,400 E4,300 1,000 AUsing the information in the table, graph the consumption schedule for this country Instructions Use the tool provided C' to plot the consumption line polnt by point points total. Use the tool Equnibrium to indicate where consumption equals disposable income. Consumption Schedule Conumption (dollarn) 21.000 lave 27000 26000 25000 24.000 23,000 22,000 21000 20,000 20,000 22000 26.000 24.000 28,000 Disposable income (dollars) &What is the stope of the consumpton schedule? Instructions Round your answer to 1 decimal place
- 25 1 Calculate the equilibrium level of investment if you have the following equations: C=0.4Yd+20, national income is 1000, government expenditures is 200, tax is 50 Investment =300 O Investment-D350 O Investment3D400 O Investment3D450 O None of the above OThe following is a hypothetical estimate of a demand curve for butter over the period 2001–10. Qa = 145 – 1.5P- 0.001Y+ 2P. Where Qa is the quantity of butter sold in grams per person per week; Pis the price of butter (in pence per kg, at 2000 prices); Yis the anmual disposable income per head (in £s at 2000 prices); Pa is the price of margarine (in pence per kg, at 2000 prices). (a) If P is 50 pence, Yis £20 000 and P is 40 pence, what is the estimated value of Qa? (b) If the price of butter went up by 6 pence per kilo, all other things equal, what would happen to the estimated demand for butter? (c) Going back to the original price of 50 pence, if the value of Y now rose to £22,000 what would happen to the estimated demand for butter? (d) What is the income elasticity of demand for butter according to your calculations in (c)? What sort of good is butter according to this result? (e) Again, going back to the original demand, if the price of margarine now rose by 10 pence what would…18. What will be the level of consumption spending at an income level of 36? a) 30 b) 24 c) 28 d) 16 e) 8
