Suppose a closed economy with no government spending or taxing is capable of producing an output of $1600 at full employment. Suppose also that autonomous consumption is $120, intended investment is $160, and the mpc is 0.50. What is the value of output (Y) in equilibrium?
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Suppose a closed economy with no government spending or taxing is capable of producing an output of $1600 at full employment. Suppose also that autonomous consumption is $120, intended investment is $160, and the mpc is 0.50.
What is the value of output (Y) in equilibrium?
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- Assume a closed economy in which, there is no government. If autonomous consumption is80, autonomous investment is 70, and marginal propensity to save is 0.25 in this economy.Then calculate the amount of equilibrium output (income)?The following are exogenous (not directly affected by income): G = 9 I = 14 X = M = 0 The consumption function is: C = k + cY, where k = 8, c = 0.6 at the point where this economy is in equilibrium what is the total level of withdrawals? Give the number to ONE decimal place.Consider an economy described by the following:Autonomous consumption ( a ) = 100Autonomous Investment = 100Marginal propensity to consume = 0.75 What is the savings function for this economy?
- a) Draw a consumption function and label the axes.b) Suppose that your friend has a consumption function of the form y=1.4x+200. Is this function sustainable in the long run? Why or why not?c) Suppose that your consumption function is y=0.75+1000. What is your marginal propensity to consume? What is your autonomous expenditure?d) State the permanent income hypothesis.e) Suppose that I raise your income today by $10, and lower it tomorrow by $10. How would your behavior change according to the consumption function (aka Keynesian, aka rule-of-thumb) model? And what about according to the permanent income hypothesis model?Consider a closed economy model where Y=C+l+G, consumption is given by the function C=100+0.9(Y-T), investment is l=100, government purchases are G=70, and the government's budget is balanced. Which of the following is false? | Group of answer choices A) Equilibrium disposable income is 2000. B) Equilibrium GDP is 2070. C) Autonomous spending is 210. D) The multiplier is 10.Suppose that the consumer’s consumption demand function is given by Cd = 0.8(Y−T)+10. Investment is Id = 20, government expenditure is G = 10, and tax is T = 10. What is the equilibrium GDP (income)? Suppose that government expenditure increases by 10 units while tax is unchanged. How will GDP change? What is the multiplier? Suppose that government expenditure increases by 10 units while tax also increases by 10 units. How will GDP change? What is the multiplier?
- Which of the following statements is correct? The saving function and the consumption function have the same slope. The consumption function is the same in the short and in the long run. Disposable income does not affect the level of savings. The steeper the consumption function, the flatter the saving function.Find the equilibrium level of income and consumption if the consumption function is C = 0.2 Y + 20 and planned investment I= 22.Suppose a closed economy with no government spending or taxing is capable of producing an output of $3,000 at full employment. Suppose also that autonomous consumption is $400, intended investment is $200, and on average households will save 25 cents of every additional dollar of income they receive. Calculate the following (express your answers as whole numbers without decimals, commas, dollar signs, or anything else). I found Value of output (Y) in equilibrium: ___2400___ Total consumption in equilibrium: ___2200___ I'm trying to find the multiplier. Could you show me a step by step on how you would figure the multiplier out?
- Consider an economy described by the following:Autonomous consumption ( a ) = 100Autonomous Investment = 100Marginal propensity to consume = 0.75 2. What is the consumption function for this economy?Consider the following economy: Y+C+I+G Y=8000 G=2500 T=2000 C=1000+2/3(Y-T) I=1200-10,000r 1) How large is the subsistence consumption of households? 2) What is the MPC(marginal propensity to consume) in this economy? What is its economic interpretation?You are given the following data concerning Freedonia, a new republic. 1) Consumption is 200 when income is zero and the marginal propensity to consume is 0.6 out of every dollar increase in income 2) Investment function: I = 200 3) AE ≡ C + I 4) AE = Y Derive the savings function? Graph equations 3) and 4) and solve for equilibrium income (Y). Suppose equation 2) is changed to I = 150. What is the new equilibrium level of income (Y)? By how much does the $50 decrease in planned investment change equilibrium income? What is the value of the tax multiplier?