The model of national economy is characterised by the following data: Household consumption C-400+0.9 DI Gross investment Ig 200 Government spending G-250 Sum of Taxes T 150 Disposable income DI = Y-T Calculate: a) Equilibrium level of income Y; b) Calculate the value of Marginal propensity to consume and value of Marginal propensity to save; c) Private consumption at macroeconomic equilibrium;
Q: Yo Which one of the following statements is false? A Y1 represents the equilibrium level of income.…
A: In a two-sector economy, government expenditure and net export will be both equal to zero. In…
Q: 1. In the circular flow model, a state of equilibrium is reached when: A) savings are equal to…
A: As you have posted multiple questions, but as per guidelines we are supposed to answer the only…
Q: T = 20 + 0.2 × Y T R = 10 − 0.1 × Y where Y is national income. The basic consumption function is…
A:
Q: If current real GDP = $52 trillion and potential real GDP = $61 trillion, then the “GDP gap” = Group…
A: GDP measures the value of goods and services that are produced with in the country during a period…
Q: Given the following set of equations for an economy model: C = A+b YD I = I* - Ir T = T* + tY…
A: IS curve shows the negative relationship between income level and interest rate . Each and every…
Q: Permanent Income of consumption is just the average of all current and future incomes. Thus, one…
A:
Q: Consider the macroeconomic model of a two-sector economy (i.e. no government or trade) using…
A: Y = C + I
Q: The figure below shows a simple macroeconomic consumption model. The letters N and D indicate…
A: The term "savings function" refers to the standard equation of savings that defines the relationship…
Q: The table gives disposable income (DI), consumption (C), and savings (S) data for the country of…
A: The sum of marginal propensity to consume and marginal propensity to save is equal to 1. Income is…
Q: In the national income model above, Y represents income, C is the consumption, G is the government…
A: The aggregate demand or expenditure is the total demand or expenditure in an economy over a period…
Q: You are given the following model that describes the economy of Hypothetica. Consumption function: C…
A: Equilibrium in the economy reaches where aggregate expenditure equals total production
Q: Study the diagram above and answer questions 2 to 4. The point labelled A2 represents:…
A: 1. Point A2 represents the consumption and investment when income is zero. These are called…
Q: Consider a closed economy model where Y=C+l+G, consumption is given by the function C=100+0.9(Y-T),…
A: Given; Consumption function; C=100+0.9(Y-T)Investment; I=100Government spendings; G=70 It is given…
Q: Shown below is the aggregate expenditures model composed of consumption and investment spending for…
A: Aggregate Expenditure = Consumption + Government Spending + Investment + Exports - Imports The rise…
Q: c. National-Income model: Closed economy i. Aggregate expenditure: AE = C +I + G Note: Exogenous…
A: Natinal income is the total factor in ome earned by the country's normal residents in an accounting…
Q: Macroeconomics Question No.5 State whether the following statements are true, false or…
A: Marginal Propensity to consume: refers to the ratio of change in consumption to the change in…
Q: In the income-expenditure model, if autonomous investment decreases by $10 billion, a. planned…
A: The income expenditure model shows the relationship between income and expenditure in an economy. It…
Q: Assume the following information for an economy what is equilibrium level of economy. Natural…
A: Natural level of output = $190b Autonomous consumption = 50 Total investment = 16…
Q: The national income model for an economy is represented as follows (units are in Ksh.M) Y = C + I +…
A: (Q)The national income model for an economy is represented as follows (units are in Ksh.M) Y = C + I…
Q: Find equilibrium GDP using the following macroeconomic model (the numbers, with the exception of the…
A: The economy is at equilibrium when the aggregate supply is equal to aggregate demand. Equilibrium…
Q: . Let the national income model be; Y = C + I0 + G , C = a + b ( Y – T) , G = g Y…
A: Given national income model :- Y = C + I0 + G C = a + b ( Y – T) G = g Y
Q: Given the following set of equations for an economy model: Consumption expenditure Investment C =…
A: Y = C + I +G + M Y = (A* + b YD) + I* -lr + M Y = A* + b (Y - T* - tY ) + I* - lr + M* + mY Y = A*…
Q: In the IS curve model, the consumer demand can be represented by the following equation: C = a +…
A: The consumption function : C = a + b(Y-T) Here a is the intercept that indicates the level of…
Q: Fill in the table below to answer the next five questions. Assume that l", G and NX are fixed.…
A: Gross Domestic Product (GDP) is the total value of all the goods and services produced inside the…
Q: Assume a hypothetical closed economy. The National income identity expression for this economy is…
A: The national income is the total income earned by all the people of a country in a particular period…
Q: Consider the closed-economy market-clearing model. Assume that the marginal propensity to consume is…
A: Here, it is given that the given economy is the closed economy with the MPC of 0.8.
Q: Based on the economic data of a country presented in the following table, complete the table!…
A: The entire quantity of demand for all finished products and services generated in an economy is…
Q: Consider a closed economy model where Y = C+ I+ G, consumption is given by the function C = 100 +…
A: In a closed economy, equilibrium is when Y = C + I + G. Autonomous spending refers to spending which…
Q: Suppose Bank of England is considering using the tool of cutting interest rates to boost household…
A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…
Q: The total expenditure in Macroland begins with these initial levels (in trillions of dollars):…
A: Multiplier = 1 / [1 - MPC] Decline in GDP = Decline in investment * Multiplier
Q: The equations defining a simple model of the economy are: C = 0.75Y+ 18 and I 22 where C, Y and I…
A: Answer: Given, C=0.75Y+18I=22 Here, C + I = AE (aggregate expenditure) C+I=0.75Y+18+22C+I=0.75Y+40…
Q: Behavioural and Structural equations of an economy are given below: C = 200 + b (Y…
A: Keynesian Model help understand the equilibrium level of income in the economy, in which the…
Q: Which of the following is not a doctrine of modern macroeconomics? A. Spending drives prices,…
A: Macroeconomics: It is a part of economics that deals with the economy as a whole. Macroeconomics…
Q: If Saving+Tax+Import > Investment+Government spending+Export, then _____ must fall to establish…
A: Here, it is given that the aggregate demand (Investment+Government spending+Export) is less then the…
Q: Consider a basic goods market model where the propensity to consume is 60% of disposable income. If…
A: Multiplier = 1 / [1 - Marginal propensity to consume] Required increase in public spending =…
Q: Suppose a closed economy with no government spending or taxing is capable of producing an output of…
A: Consumption is the sum of Autonomous consumption and induced consumption. Autonomous consumption…
Q: Let the national income model be; Y = C + I0 + G , C = a + b ( Y – T) , G = g Y…
A: Given equations:- Y = C + I0 + G C = a + b(Y - T) G = gY
Q: Suppose an economy is described by the following equations: Y = C + I + G + X – M C = 14 + 0.60Yd…
A:
Q: Consider the following model of an economy operating with fixed wages, prices and interest rates and…
A: PART 1: NOTE: Since we only answer up to 3 sub parts, we will answer the first 3.please resubmit the…
Q: In the aggregate expenditures model, all are true except: a)the price level is shown b)the…
A: The AE(aggregate expenditures) model relates real GDP to aggregate expenditures. The point of…
Q: Suppose an economy is described by the following equations: Y = C + I + G + X – M C = 14 + 0.60Yd…
A: Hi. since there are two questions we will answer the first one.
Q: Multiple choice question and give a short explanation about your answer: According to the Fisher…
A: In the two-period model, the consumers behave rationally and smooth their consumption in the current…
Q: Consider a closed economy model where Y = C+I+G, consumption is given by the function C = 100 +…
A: Budget is the record of governments expenses and revenues. The budget is said to be in balance when…
Q: Assume that the consumption function for the above economy is C = 1000 + .75Yd fill in the empty…
A: Understanding of the level of consumption, investment and government expenditure helps find the…
Q: In the model of the goods market presented in Chapter 3, which of the following variables is…
A: An exogeneous or external variable is one that exists independently of the economic model. Exogenous…
Step by step
Solved in 4 steps
- You are an economic advisor to the government. Discuss your opinion . a) How COVID-19 pandemic will affect the consumption behavior as well as the investment done by the firms and household for the next two years? b) What are the actions or policies that the government can implement to face this situation? please answers with analysis and --graph (if possible)DI, C and S Given the following income, spending, and savings data, please answer the following questions: Savings (S) Disposable Income (DI) 0 $ $ 50000 $100000 $150000 d. Consumption (C) $ 40000 $ 70000 $100000 $130000 a. Solve for savings at each level of disposable income (DI) and place the values in the blanks above. b. Solve for the marginal propensity to consume (MPC) between each disposable income level. c. Although you were not asked to do so in this example, whenever solving for the APC, you should find that the APC decreases as the DI rises. Why would the APC decrease when the consumption values continue to increase as disposable income increases? State the value for the break level of income.Consumption and Savings Functions Disposable Income Consumption Saving -50 100 200 400 a. Please complete the table (assume linear functions) b. How much is Autonomous Consumption and Autonomous Savings? C. How much is mpc, mps, and E ? Write out the consumption funetion and the savings function, Using the data from the table, please graph the consumption and savings schedules in a model. d. e. For an increase in disposable income of $2000, using the current mpc, show five rounds of increases in planned expenditure. f.
- In the Income-Expenditure model, which of the following are assumed to be given (or exogenous)? a Incomes and expenditures b. None of these c. Prices and incomes d. Expenditures and Prices e. Prices and interest rates For this year. • You earn a before-tax income of $77,000, on which you pay taxes equal to $4,000. • You receive $4,000 in benefits from the government. What is your disposable income this year? Do not enter the $ sign. Round to one decimal place if required. Answer:Study the scenario and complete the question(s) that follow(s):SilesiaYou are provided with the following information about an imaginary economy called Silesia. Use the information provided in the table to answer the questions below.Government expenditure 400 Exports 250 Autonomous imports 50 Autonomous consumption 150 Investment Expenditure 300 Full- mployment output 2040 Marginal propensity to consume 0.75 Marginal propensity to import 0.15 Tax rate 0.25Source: Bester, N. 2017.5.1 Derive and calculate the consumption function for the data provided. Show all formulas and calculations used. 5.2 Calculate autonomous spending. Show all formulas and calculations used.5.3 Calculate the multiplier. Show all formulas and calculations used. Round off your final answer to 1 decimal.Assume that a nation's marginal propensity to consume (MPC) is 0.75. A highiy productive, cost-cutting technology is developed for the production of commercial airplanes. The total industry expenditure in this nation is $100 million for the immediate acquisition and adoption of this technology. (a) For this nation, identify and explain how much this spending on new technology will change each of the following in the first round: i. Income (GDP) L. Saving i. Consumption (b) Assuming a closed economy and no leakages, identify and explain how much this spending on new technology will change each of the following at the end of the final round: i. Income (GDP) ii. Saving li. Consumption
- n an effort to make sales projections, M/s K, B and A, the three B-school executives of Vengaboys Inc., were discussing about the national income and its growth in Ibiza. K had estimated a linear consumption function for Ibiza to be C = 100 + 0.6 Y, and investment to be I = 100 per ear. In Ibiza, there was no income tax and government spending was minimal (assume 0). Ibiza was a closed economy, and hence no exports and imports. (i)K immediately knew what the investment Multiplier was. Can you find out? (ii)What is the level of income in Ibiza? (iii)K estimated that with Government spending 100 on a new road to be constructed, the income levels are sure to go up. K quickly calculated the change in income and the new income level to be:The following table shows data for the economy before the decrease in saving. Suppose that the decrease in saving causes consumption to rise from $280 million to $320 million. Assume Say's law holds in this economy. Fill in the data for the economy after the decrease in saving. Before Saving Decrease After Saving Decrease Consumption (C) $280 million $320 million Investment (I) $200 million $ million Government Purchases (G) $250 million $ million Exports (EX) $500 million $500 million Imports (IM) $300 million $300 million As a result of the decrease in saving, total expenditures will .(1)The following macroeconomic model describes the economy of Sunderland. 1. Y= C +I + G + NX 2. C = 220 + 0.63 Y 3. 1 = 1000- 2000R 4. G = Go 5. NX = 525-0.10Y-50OR 6. M (0.1583Y-1000R)P (a)ls it a fair characterization to refer to equation #2 as a "simple" consumption function? Explain. (b)Derive the expression for equilibrium real output, Y, for this economy. Note: In your final expression for Y, restrict coefficient values to three decimal points. (c) Suppose government spending is 1200 , money supply by the Central Bank is 900 and the price level is 1, find the value of GDP (Y) and equilibrium interest rate (R) for Sunderland. Income Identity Consumption function Investment function Government Expenditure Net export function Money market equilibrium (2)The questions in this section are related to the macroeconomic model of Sunderland. (a)The expression you are asked to derive in question #1b can be considered an aggregate demand curve. Do you agree? Explain your answer. (b)Sketch…
- 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 OConsumption and Saving- End of Chapter Problem Which one of the following reasons makes it easier to forecast the impact of an income change on consumption for hand-to-mouth consumers than for consumption smoothers? It is easier because hand-to-mouth consumers only spend their permanent income. hand-to-mouth consumers save a large portion of their income. the marginal propensity to consume is 1 for consumption smoothers. hand-to-mouth consumers spend their entire income as they earn it.don't use Al bot or chat GPT otherwise downvote.correct answer will get instant upvote show calculation Suppose the consumption factor is C= $100 + .8Y, initial national income Y + $800, and intended investment equals $20. The equilibrium level of national income is equal to. a) $600 b) $800 c) $700 d) $740 e) $760 give correct option with explanation and explain why others option are wrong .