For the following economy, find autonomous expenditure, the multiplier, short-run equilibrium output, and the output gap. By how much would autonomous expenditure have to change to eliminate the output gap? C = 550 + 0.75 (Y – T ) I p = 200 G = 200 NX = 60 T = 180 Y* = 3,400 Instructions: Enter your responses as absolute numbers. Autonomous expenditure: Multiplier: Short-run equilibrium output: There is (Click to select) an expansionary no a recessionary output gap in the amount of . Autonomous expenditure would need to (Click to select) increase decrease stay the same by to eliminate the output gap.

For the following economy, find autonomous expenditure, the multiplier, short-run equilibrium output, and the output gap. By how much would autonomous expenditure have to change to eliminate the output gap? C = 550 + 0.75 (Y – T ) I p = 200 G = 200 NX = 60 T = 180 Y* = 3,400 Instructions: Enter your responses as absolute numbers. Autonomous expenditure: Multiplier: Short-run equilibrium output: There is (Click to select) an expansionary no a recessionary output gap in the amount of . Autonomous expenditure would need to (Click to select) increase decrease stay the same by to eliminate the output gap.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.B: The Multiplier With Variable Imports

Problem 3TY

See similar textbooks

Similar questions

equilibrium is important in the simple expenditure model so we need to know the following: what is the signal or indicator in the economy that will tell us we are not in equilibrium? What value for that signal will assure us we are in equilibrium? Explain why. ( Please solve whole question ASAP . I will definitely Rate your answer )
For the following economy, find autonomous expenditure, the multiplier, short-run equilibrium output,and the output gap. By how much would autonomous expenditure have to change to eliminate theoutput gap? C= 2,500 + 0.75 (Y – T ) I p= 2,000 G= 3,000 NX= 100 T= 2,500 Y*= 22,500 Calculate the multiplier in the economy?
For the following economy, find autonomous expenditure, the multiplier, short-run equilibrium output, and the output gap. By how much would autonomous expenditure have to change to eliminate the output gap? C = 2,500 + 0.75 (Y – T ) I p = 1,500 G = 2,000 NX = 300 T = 1,500 Y* = 19,900 Instructions: Enter your responses as whole numbers. Autonomous expenditure: 5175Multiplier: 4Short-run equilibrium output: 20,700Output gap: (DO THIS PART)Autonomous expenditure would need to (Click to select) decrease increase by ____________to eliminate the output gap. (DO THIS PART
Suppose that country Y is identical to country Z, with the exception that country Y's population has a lower marginal propensity to consume than country Z. Initially, both countries have the same level of real GDP. The diagram shows the expenditure curve for country Y. Using the line drawing tool, draw the expenditure curve of country Z in Figure 1. Label your curve 'Ez'. Carefully follow the instructions above and only draw the required object. Figure 1 Planned Expenditure ($, trillions) Real GDP, Y ($, trillions) Ex Select ✓ Line
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?
Question 2 Refer to the information provided in Figure 23.9 below to answer the question(s) that follow. Aggregate expenditures ($ millions) 225 200 175 150 45° AE 100 200 300 Aggregate output ($ millions) Figure 23.9 a) Refer to Figure 23.9. Write the equation for the aggregate expenditure function (AE). Show your work. b) Refer to Figure 23.9. What is the equilibrium level of output in this economy? State the equilibrium condition used to determine this. c) Explain the forces that maintain/drive the economy to this equilibrium by considering what will happen at the following two levels of output, $300 million and $100 million. You will need to discuss changes in investment through unplanned inventories and the response of output. d) Refer to Figure 23.9. How will equilibrium aggregate expenditure and equilibrium aggregate output change as a result of a decrease in investment by $20 million? e)The interest rate is an exogenous factor that effects the level of investment in an economy.…
In an economy, autonomous consumption expenditure is $50 billion, investment is $200 billion, and government expenditure is $250 billion. Exports are $500 billion and imports are $450 billion. Assume that net taxes and imports are autonomous and price level is fixed. a)What is the consumotion function? b)What is the equation of the aggregate expenditure curve? c)Calculate equilibrium expenditure. d)Calculate the multiplier. e)If investment decreases to $150 billion, what is the change in equilibrium expenditure ?
Consider the following demand components: Consumption described as a following: 120 million USD as an autonomous level of consumption plus 80% of disposable income spends on consumption. I = 50 G=10 T= 25 Assuming goods market equilibrium, show equilibrium level of output in this economy: How much output increase, if G increase from 10 to 20, show your calculations:
An economy is described as follows: C = 400 + 0.6(Y – T) I p = 200 G = 200 NX = 60 T = 100 Y* = 2,100 a. For the economy described above, find autonomous expenditure, the multiplier, short-run equilibrium output, and the output gap.Instructions: Enter your responses as absolute values.Autonomous expenditure: 800 correct.Multiplier: 2.5 correct.Short-run equilibrium output: 2000 correct.There is a recessionary output gap in the amount of 100 correct.. SOLVE PART (b)b. Illustrate this economy’s short-run equilibrium on a Keynesian cross diagram.Instructions: On the graph below, use the line tool 'PAE' to draw the aggregate expenditure line using the points at Y = 1,500 and Y = 2,500 only. Then use the point tool 'Short-term eq.' to identify the equilibrium level of income and expenditure.
C= 500 + 0,8Y, tax rate(t)= 0,25, G=1000 ve I= 1200. X= 500, M= 500 + 0,1Y Calculate the equilibrium level of output. Calculate the budget balance at equilibrium level of Y. Calculate the trade balance at equilibrium level of Y. Calculate the multiplier for I(investment).
What is exogenous (autonomous) expenditure and what is the value of the multiplier? Calculate equilibrium output for this economy. Show how you obtained your figure.
The graph models an economy in equilibrium with a real GDP of $180 billion. Suppose that consumers' expectations about future incomes change, causing unplanned inventory investment to increase by $30 billion. Shift the planned aggregate expenditure (AE) line to show the effect of this change. *Image* 1) This change will cause the equilibrium level of real GDP to a) decrease. b) remain unchanged. c) increase. 2) By how much will GDP change once the new equilibrium is reached? If GDP will decrease, be sure to include a negative sign. GDP change: $ ________ billion