Question 2 The IS-curve with the multiplier Y=¹[a b(rt-F)] ______ the baseline IS-curve Ỹ = a −b(rt − F). is steeper than is flatter than has the same slope as
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A9.
![Question 2
The IS-curve with the multiplier Ỹt: =
Ytā - b(rt - F).
is steeper than
is flatter than
has the same slope as
₁¹ [ā - b(rt - F)]
the baseline IS-curve](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbb335be8-4508-416d-b56d-2089b55e50df%2F007c8ebb-f301-4b67-a9cd-068c26bdcd2c%2Fd9csuac_processed.png&w=3840&q=75)
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- The 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 MPCProve that the multiplier is equal to 1/(1-mpc)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
- 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.Please also find the MPS to the question with the MPC of 0.50 And find the MPC to the question with the MPS of 0.4. This question repeats the exercise of Study Exercise 12, but for spe- cific numerical values. The equations of the model are C = 50 +0.7YD T = (0.2)Y I = 75 X = 50 G = 100 IM = (0.15)Y i a. Compute the AE function and plot it in a diagram. What is to- tal autonomous expenditure? b. What is the slope of the AE function? c. Compute the equilibrium level of national income. d. Suppose X rises from 50 to 100. How does this affect the level of national income? e. What is the simple multiplier in this model?
