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Macroeconomics
C=600+0.6Yd+900I, T=200+0.25*, G=990
1.calculate the value of the multiplier
2.is the government running a purplus or deficit?
1.calculate the value of the multiplier
2.is the government running a purplus or deficit?
Macroeconomics
calculate the marginal propensity to consumer when the aggregate output/income changes from 2500 to 300?
Macroeconomics
Briefly explain the difference between saving and disaving?
Macroeconomics
Explain the reasons why the multiplier could decrease in value
Macroeconomics
Suppose we add government sector with: T=200+0.25*Y, G=990 where T is taxes (net of treansfers) and G is government spending on goods and services.
a) Is the government running a surplus or a deficit? Explain your answer
b) Explain the reason why the multiplier could decrease in value.
a) Is the government running a surplus or a deficit? Explain your answer
b) Explain the reason why the multiplier could decrease in value.
Macroeconomics
1. Consider the following simple model of an economy operating with fixed wages, prices, and interest rates, and excess capacity (operating below the full-employment level): where I=900
C=600+0.6Yd+I
Where C is consumption, Yd is disposable income (equal to national income, Y, in absence of a government sector), and I is investment.
a) If aggregate expenditures (AE) are a function of Y, calculate the equilibrium level of income.
b) Calculate the value of the multiplier.
C=600+0.6Yd+I
Where C is consumption, Yd is disposable income (equal to national income, Y, in absence of a government sector), and I is investment.
a) If aggregate expenditures (AE) are a function of Y, calculate the equilibrium level of income.
b) Calculate the value of the multiplier.
Macroeconomics
Explain why it is not a sustainable policy to attempt to keep unemployment below its natural level according to the augmented Phillips Curve model?
Are the following statements true or false?
1. Aggregate demand is the sum of total domestic spending by private sector.
2. Consumer spending is an injection in the circular flow of income and spending.
3. The typical value for the MPC is less than 1.0.
4.The slope of the consumption function is measured by the marginal prospensity to save.
5. To economists, investment means buying stocks and bonds
6. If the economy is suffering a recession, inventories are probably falling.
7. Producers will change their prices when GDP is at the equilibrium level.
8. When income rises, total expenditures remain constant.
9. Equilibrium is the point where total spending equals total output, or GDP.
10. Economic growth is the same as economic developmet.
Are the following statements true or false?
1. Aggregate demand is the sum of total domestic spending by private sector.
2. Consumer spending is an injection in the circular flow of income and spending.
3. The typical value for the MPC is less than 1.0.
4.The slope of the consumption function is measured by the marginal prospensity to save.
5. To economists, investment means buying stocks and bonds
6. If the economy is suffering a recession, inventories are probably falling.
7. Producers will change their prices when GDP is at the equilibrium level.
8. When income rises, total expenditures remain constant.
9. Equilibrium is the point where total spending equals total output, or GDP.
10. Economic growth is the same as economic developmet.
Macroeconomics
what is included in the current account?
Macroeconomics
What do economist mean by the word inflation?
Macroeconomics
The current position of the economy is given by the following variables:
Ca = 200 (autonomous consumption)
G = 400
T = 400
I = 300
X= 200
M = 300
MPC = 0.80
We Know that Y (income) = Aggregate expenditures (C+I+G+X-M)
1) Find the equilibrium level of GDP (Y*). (4 points)
2) What is the equilibrium amount of saving (S)? (2 points)
3) Write the saving function. (2 points)
4) Show that injections equal leakages. (2 points)
Now suppose that the full employment GDP = 2000
5) The autonomous spending multiplier is equal to what? (1 point)
6) What is the necessary change in government spending alone that is needed to get the
economy to full employment? (2 points)
7) The autonomous tax multiplier is equal to what? (1 point)
8) What is the necessary change in taxes alone that is needed to get the economy to full
employment? (3 points)
9) The balanced budget multiplier is equal to what? (1 point)
10) What is the necessary change in government spending and taxes that is needed to get
the economy to full employment and ke
Ca = 200 (autonomous consumption)
G = 400
T = 400
I = 300
X= 200
M = 300
MPC = 0.80
We Know that Y (income) = Aggregate expenditures (C+I+G+X-M)
1) Find the equilibrium level of GDP (Y*). (4 points)
2) What is the equilibrium amount of saving (S)? (2 points)
3) Write the saving function. (2 points)
4) Show that injections equal leakages. (2 points)
Now suppose that the full employment GDP = 2000
5) The autonomous spending multiplier is equal to what? (1 point)
6) What is the necessary change in government spending alone that is needed to get the
economy to full employment? (2 points)
7) The autonomous tax multiplier is equal to what? (1 point)
8) What is the necessary change in taxes alone that is needed to get the economy to full
employment? (3 points)
9) The balanced budget multiplier is equal to what? (1 point)
10) What is the necessary change in government spending and taxes that is needed to get
the economy to full employment and ke
