Which of the following components of aggregate expenditure is most subject to crowding out? O a. Consumption expenditures b. Government purchases of goods and services c. Imports O d. Investment spending e. National saving
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- How do budget surpluses and budget deficits affect the consumption and investment components of GDPA. Place each of the following transactions in one of the four components of expenditure: consumption, investment, government purchases, and exports/imports. Island Manufacturers (Jamaica) sells furniture to the Jamaican Government. Island Manufacturers (Jamaica) builds a new line of home furniture to be sold next year.Explain some reasons why consumption spending and gross private domestic investment spending are so important. What determinants do they have in common?
- What is the relative importance of consumption spending (C) in aggreagte demand and some factors that affect it? What is the relative importance of investment spending (I) in aggreagte demand and some factors that affect it? What is the relative importance of government spending (G) in aggreagte demand and some factors that affect it? What is the relative importance of Net Export (NX) (Net Export = spending on exports (X) - imports (M)) in aggreagte demand and some factors that affect it?The following are a year's data for a hypothetical economy. Comsmption $400B, Government purchases $350B, GDPI $150B, Exports $150B, Imports $100B, Depreciation $50B. a) what is the value of GDP and NDP? b) what is the value of Net private Domestic investment ? c) suppose that in the next year exports increases to $175B, imports increase to 200B, and consumption falls to 350B. What will GDP be in that year?How does an increase in government spending affect the aggregate expenditure line? It shifts the aggregate expenditure line upward. It shifts the aggregate expenditure line downward. It increases the slope of the aggregate expenditure line. It decreases the slope of the aggregate expenditure line.
- Why are changes in inventories included as part of investment spending? Suppose inventories declined by $1 billion during 2008. How would this affect the size of gross private domestic investment and gross domestic product in 2008? Explain.Total spending in the economy is equal to consumption plus investment plus government spending plus net exports. If households want to save and thus do not use all of their income for consumption, what will happen to total spending? Because total spending in the economy is equal to total income and output, what will happen to the output of goods and services if households wants to save more?Which components of Aggregate Expenditure change as a result of a change in real GDP? Question 3Answer a. consumption, investment, and exports b. consumption and investment c. consumption, investment, and government expenditures d. consumption and governments e. consumption and imports
- What are the four categories of aggregate expenditure (demand)? Give an example of each. 9.1 Calculate the Marginal Propensity to Consume and the Marginal Propensity to Save. Fill in the blanks in the following table. Show that the MPC plus the MPS equals 1. National Income & Real GDP (Y) Consumption (C) Saving (S) MPC MPS $9,000 $8,000 $10,000 $8,600 $11,000 $9,200 $12,000 $9,800 $13,000 $10,400When real GDP is zero, investment is $2.0 trillion, government expenditure is $1.5 trillion, exports are $1.5 trillion, and consumption expenditure is zero. Aggregate expenditure (trillions of 2012 dollars) 7.0- Draw a line that shows autonomous expenditure. Label it A. 6.0- What is consumption expenditure minus imports, which varies with real GDP called? 5.0- O A. actual expenditure 4.0- O B. domestic expenditure O C. aggregate expenditure 3.0- O D. induced expenditure 2.0- 1.0- 0.0+ 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 Real GDP (trillions of 2012 dollars) >>> Draw only the objects specified in the question. Click the graph, choose a tool in the palette and follow the instructions to create your graph. 20 000 000 DII DD esc F1 F2 F3 F4 F5 F6 F7 F8 F9 F10 F11 23 $ & 1 2 4 7 8 Q W E P tab TThe table below shows hypothetical values of the expenditure components for the United States in 2016. Expenditures in the United States Durable goods Nondurable goods Services Gross investment Exports Imports Federal government State and local government $ Expenditure Component Using the values in the table, calculate the following aggregate expenditures and nominal GDP. Instructions: Round your answers to one decimal place. If you are entering a negative number, include a minus sign. a. Calculate consumption expenditures in 2016. billion b. Calculate the amount of net exports in 2016. $ GA billion c. Calculate nominal GDP in 2016. Amount of Expenditure (billions of dollars) $1,352.5 2,789.2 8,304.5 2,824.7 2,473.3 2,940.7 1,326.7 2,070.4 billion