If Investment increases by $15 billion and the economy's MPC Is 0.8, the aggregate demand curve will shift Multiple Cholce nightward by $75 billin at each price level. nghtward by $15 billion at each price level. leftward by $75 billion at each price level. leftward by $30 billion at each price level.
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Q: If investment increases by $15 billion and the economy’s MPC is 0.8 the aggregate demand curve will…
A: Increase in investment= $15 billion MPC= 0.8 Multiplier=1(1-MPC) =1(1-0.8)…
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A: GDP or Gross Domestic Product is the total market value of all finished goods and services produced…
Q: An economy has a MPC of 0.80. Suppose only that taxes are increased by $300 billion. Calculate the…
A: MPC is the marginal propensity to consume which is the proportion of income spent on consumption.
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Q: Assume an economy is currently in equilibrium with Real GDP at $716 bllion. If potential Real GOP AS…
A: Real GDP = $716 billion Potential GDP = $627 Inflationary GAP = Real GDP - Potential GDP…
Q: An economy with zero net exports is described below: C = 100 + 0.8 (Y – T) I p = 80 G = 140 NX =…
A: Given: C = 100 + 0.8 (Y – T) I = 80 G = 140 NX = 0 T = 170 The multiplier in this economy is 5.
Q: The following questions refer to this table: a.At each level of output, calculate saving. At each…
A: a.
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Q: Refer to the information provided in Figure below to answer the question(s) that follow. AS2 AS ASo…
A: The decline of government spending causes the aggregate demand curve to shift left.
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A: Aggregate Demand = Aggregate Expenditure = Y Aggregate Expenditure = C+I+G+X-IM
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A: AE function refers to aggregate expenditure function.
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Q: creased by 4 billion, and the marginal propensity to consume on Troll Island is equal to 0.7. What…
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Q: The 2020 budget included a $33 billion increase in military spending. By how much did this added…
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Q: An economy’s aggregate demand is specified as follows: C = 300 + 0.8Yd, Investment (Io) = 230,…
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Q: Autonomous Consumption R535m Marginal propensity to consume is 0.75 Investment Spending R322m…
A: We have to calculate the value of induced imports in this economy,given the equilibrium level of…
Q: Nigeria is currently experiencing a recessionary gap of approximately 24.6 billion in their…
A: Tax multiplier = MPC / 1-MPC Recessionary gap = Real GDP is less than potential GDP.
Q: I. Taiwan has an income tax rate, t,, of 28% and a Marginal Propensity to Save (MPS) of 0.4. It is…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: If investment increases by 24 billion and the economy's MPC is 0 0.5, the aggregate demand curve…
A: Aggregate demand is the sum of the monetary value of all the goods and services produced in the…
Q: Which of the following will shift the SRAS curve to the right? O An increase in the coefficient a in…
A: SRAS curve stands for Short-run Aggregate Supply Curve which is defined as the total production of…
Q: ne short-run equilibrium output when real interest is 7%. b) Find the income-expenditure multiplier.
A: Consumption (C) = 1700+0.8(Y-T) - 2000r Investment (Ip) = 3000 - 1100r Government expenditure (G) =…
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A: Equilibrium is establuished when aggrgate expenditure ius equal to agrggate output.
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Q: Refer to the information provided in Figure 11.4 below to answer the questions that follow. AS2 ASo…
A: Aggregate supply(AS) or total output is the curve which shows us the total products and services…
Q: The long-run aggregate supply curve touches the horizontal axis at a value that equals O Aggregate…
A: here we find the correct option as follow;
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- Imagine there is a consumption smoother (also known as a PIH consumer) who expectsto live for another 40 years and to work for another 30 years. They just learned thatthey will receive a permanent pay increase from their job of $800. How much extra dothey consume this year? What is their marginal propensity to consume?Which of the following will NOT shift the ADTT curve? O a. A rise in consumer confidence O b. A rise in interest rates O c. A rise in government spending O d. A rise in exportsThe slope of the PE (planned expenditure) line is always 45 degrees the inverse of the spending (government purchases) multiplier O negative, since as the real interest rises, economic investment falls O MPC
- Which of the following will NOT shift the ADT curve? O a. A rise in government spending O b. A rise in exports Ос. A rise in interest rates O d. A rise in consumer confidenceAutonomous Consumption R535mMarginal propensity to consume is 0.75Investment Spending R322mGovernment Spending R300mImports R175m + 0.08YExports R283mTaxes = 0.1YFull employment level of output is R3 483m Calculate the value of induced imports in thiseconomy, given the equilibrium level of output.Assume an economy operates in the intermediaterange of its aggregate supply curve. State thedirection of shift for the aggregate demandor aggregate supply curve for each of thefollowing changes in conditions. What is theeffect on the price level? On real GDP? Onemployment?a. The price of crude oil rises significantly.b. Spending on national defense doubles.c. The costs of imported goods increase.d. An improvement in technology raises laborproductivity.
- Assume the marginal propensity to consume is 0.5 (c1 =0.5). Given this data, which of the following events will result in the greatest increase in output? I decreases by 300. O I decreases by 250. G increases by 300. Tincreases by 250. G decreases by 300.If investment falls by $5 billion. The marginal propensity to consume is 0.75. So Real GDP O Increases by $20 billion O Increases by $40 billion O Decreases by $20 billion O Decreases by $25 billion Next « Previous NWhich of the following policies will NOT shift the Aggregate Expenditure curve upward? Select one: O a. increasing autonomous taxes O b. decreasing autonomous taxes O c. increasing autonomous transfer payments O d. increasing government expenditures on goods and services
- If house holds decide to save a larger portion of thier income, what effect would this have on the output, employment and price level in the short runThe slope of the aggregate expenditure line is always this slope equals the than 1. If there are no imports or taxes, O greater: marginal propensity to save O greater: marginal propensity to consume O less; marginal propensity to consume O less; marginal propensity to saveEquilibrium real GDP is $400 billion, the MPC = 0.9, and there are no income taxes or imports. Investment increases $40 billion. If the price level is constant, after the in be Select one: Oa. $600 billion. Ob. $800 billion. Oc $360 billion. O d. $440 billion.