LRAS SRAS P. AD $1000 $1200 Refer to Figure 34-11. Suppose the multiplier is 5 and the economy is currently at point A. To stabilize output at $1000, the government should purchases by $_
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- The cost of rebuilding the Philippines after typhoon Haiyan could reach USD 5.8bn”, a senior official has said. Assume the government of Australia Department of Foreign Affairs and Trade provided a grant of USD 5.8 billion. Also assume that despite the hardships the Philippine families experienced, 15% was the beneficiary savings from the Australian grant. Further, assume all other factors remain constant.a. Calculate the total effect of the spending multiplier of the Australian government grant on the Philippine economy GDP growth. b. Examine the overall multiplier effect of the USD5.8 billion grant on the Philippine economy. Answer asap n correctly with proper typed explanation1. According to the Bureau of Economic Analysis, during therecession of 2007–2009, household saving as a fraction of dis-posable personal income increased from a low of just over1 percent in the first quarter of 2008 to 5 percent in the secondquarter of 2009. All else equal, what impact would this changein saving have on the MPC, MPS, and multiplier? How wouldthis change affect equilibrium output when planned invest-ment changes? 2. Assume in a simple economy that the level of saving is –500 whenaggregate output equals zero and that the marginal propensity tosave is 0.2. Derive the saving function and the consumption func-tion, and draw a graph showing these functions. At what level ofaggregate output does the consumption curve cross the 45° line?Explain your answer and show this on the graph.Suppose MPC equals 0.9, government taxes 30% of all incomes, and the marginal propensity to import equals 0.07. The economy's real GDP is currently $5,454 billion while its potential real GDP is $6,000 billion. Glven a horizontal SRAS curve, what change in government spending on goods and services would bring the economy to full employment real GDP? When doing the calculations, round the value for the multiplier to 2 decimal places, and round your final value for the change in G to the nearest billion.
- Given that C = 1000 + 0.8 Y and I = $200 %3D Use the injection and leakage approach to find out the equilibrium income What is the value of the investment multiplier? Find out the amount of saving and consumption respectively. a. b. C. ntion i ncreas es by 00 how willIif the MPC= 75, how much of an increase in Government Spending woud take to shit the economy trom the short unguibrumat GOP0OM e long un utrum GOP=144M (l else equal Select one a $22M b $44M C. $0 SM d. $11MIf consumption is C=100+0.75Yd Taxes is T=50+0.5Y Export is X=200 Import is M=50+0.25Y Government spending is G=150 Investment is I=200 Usethemultiplierapplicabletoexport,toexplainhowa100–billiondeclineindemand forexportcouldaffecttheeconomy’s: (i) Balanceofpayment
- The spending multiplier, m, is V - MPC). af the MPC is 0.9, what is the spending muitiplier? bị Now suppose government spending increases by $90 million By how much will GDP rise? milionPlease see attachment Answer neatly Show all your work. Based on the above diagram: 1. Calculate MPC? 2. If Private Investment increases by 100, calculate the new level of NI. 3. If full-employment NI is at 3000, by how much should Government spending change? 4. What is the new NI, If 1/2 of those government expenditures are financed through taxes?10.pr3 Following is a saving and investment schedule indicating that planned investment is constant 360 11 13 15 17 15 15 15 15 15 a) The equilibrium real GDP is $And saving and investment are both b The MPS and the multiplier is AS2 rise in the g schedule will cause real GDP to tie by S d) Use the investment schedule given in the table and assume a 52 increase in the saing schedule in the table that is, saving at every real GOP increase by S and at this real GOP, saving 4.1. Equilibrium real GDP will to.5 15 will be S d.2. The amount by which real GDP changes depends on the size of the change in the saving schedule and the size o
- Assuming no govemment or foreign sector, if the MPC is 0.5, the multiplier is Select one: a. 5. stion O b. 2. c. 0.5. 0.5. d. 0.2.6. When households opt to increase savings; consumption decreases from Co = 240 + 0.9YD to C = 140 + 0.9YD. Assume AS = 2p, I = 100, R = 100 + 0.1y, G = 50 and NX = 200 – 0.01Y – 0.1p. а. Provide two labelled diagrams with supporting calculations showing AS/AD and NS/NAF to illustrate how prices and real GDP and savings respond to this change. Show equilibrium yo, y1 and y2. Ignore long run considerations. b. Explain whether or not this example exhibits a Paradox of Thrift.6. When households opt to increase savings; consumption decreases from Co = 240 + 0.9YD to C = 140 + 0.9YD. Assume AS = 2p, I = 100, R = 100 + 0.1y, G = 50 and NX = 200 – 0.01Y – 0.1p. а. Provide two labelled diagrams with supporting calculations showing AS/AD and NS/NAF to illustrate how prices and real GDP and savings respond to this change. Show equilibrium y0, y1 and y2. Ignore long run considerations. b. Explain whether or not this example exhibits a Paradox of Thrift.