Question

In the Keynesian Model assume the following information: C=1000+0.5Yd I=300 G=200 T=100 here Yd=Y-T. Note that...

In the Keynesian Model assume the following information: C=1000+0.5Yd I=300 G=200 T=100 here Yd=Y-T. Note that I, G, T, represents private investment, Government spending and Taxes, respectively. What are: (i) the total injections and (ii) total leakages What is the equilibrium level of income, consumption, and saving and disposable income Assume that the level of output is 1200 how does the economy adjust to equilibrium, specifically mention inventory levels. Suppose private investment will decrease by 150, by how much the government needs to change government spending to prevent output from changing.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer:-

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose the following aggregate expenditure model describes the US economy: C = 1 + (8/9)Yd T...
Suppose the following aggregate expenditure model describes the US economy: C = 1 + (8/9)Yd T = (1/4)Y I = 2 G = 4 X = 3 IM = (1/3)Y where C is consumption, Yd is disposable income, T is taxes, Y is national income, I is investment, G is government spending, X is exports, and IM is imports, all in trillions $US. (a) Derive a numerical expression for aggregate expenditure (AE) as a function of Y. Calculate the equilibrium...
The US economy is represented by the following equations: Z=C+I+G, C=300+.5YD, YD =Y T T =400,...
The US economy is represented by the following equations: Z=C+I+G, C=300+.5YD, YD =Y T T =400, I =250, G=1000 Given the above variables, calculate the equilibrium level of output. Now assume that consumer confidence increases causing a rise in autonomous consumption (c0) from 300 to 500. What is the new equilibrium level of output? How much does income change as a result of this event? What is the multiplier for this economy?
C = 50 + 0.80Yd; C = consumption function; Yd = disposable income (Y-T) T =...
C = 50 + 0.80Yd; C = consumption function; Yd = disposable income (Y-T) T = 30; T = Tax revenue I = 100; I = Investment G = 150; G = Government expenditure Yf = Full Employment RGDP (Potential RGDP) = 1600 14. Using the value of MPC = 0.75, and knowing the difference between the values of expenditure multiplier and the tax multiplier, with reduction of taxes by $300 billion (other things staying the same), estimate increased level...
Suppose you are developing a Keynesian Cross Model with the following information: C = 220+(0.75(Y-T), Planned...
Suppose you are developing a Keynesian Cross Model with the following information: C = 220+(0.75(Y-T), Planned Investment I = 500, G = T= 500 a. Please find out the equilibrium income. b. Please find out what is the consumption at the equilibrium level. c. Please graph the Keynesian Model to locate the equilibrium between the income and expenditure. d. What level of government purchase is required to achieve an income level of $ 3700? e. What is the mpc for...
In an open keynesian economy, the domestic households’ consumption Cpl = 100 + 0,75Yd, investment I...
In an open keynesian economy, the domestic households’ consumption Cpl = 100 + 0,75Yd, investment I = 400, the net tax rate t = 0,2, government expenditure on goods and services G = 300, exports X = 200, and the marginal propensity to import MPI = 0,1. a) Calculate the equilibrium output in this economy. b) Demonstrate whether leakages equal injections to the circular flow.
1. Suppose the United States economy is represented by the following equations: Z= C + I...
1. Suppose the United States economy is represented by the following equations: Z= C + I + G , C = 500 + 0.5Yd, Yd = Y − T T = 600, I = 300, G = 2000, Where, Z is demand for goods and services, Yd is disposable income, T is taxes, I is investment and G is government spending. Y is income/production. (a) Assume that the economy is in equilibrium. What does it mean in terms of the...
Assume that GDP (Y) is $6000, personal disposable income (Yd) is $5100, and the government budget...
Assume that GDP (Y) is $6000, personal disposable income (Yd) is $5100, and the government budget deficit (BD) is $200. Consumption (C) is $3800 and the trade deficit is $100. Also, assume that Yd = Y+TR-TA, where TR are the government transfers and TA are the taxes. a. How large is saving (S)? b. How large is investment (I)? c. How large is government spending (G)?
In the Keynesian Cross, assume that the consumption function is given by: C = 200 +...
In the Keynesian Cross, assume that the consumption function is given by: C = 200 + 0.8 (Y-T). Assume that: I = I ̅= 100, G = G̅ =100, T = T̅ =100. a) Use graphical analysis to demonstrate the determination of equilibrium income. b) What is the equilibrium level of income? c) If government spending increase to 125, what is the new equilibrium income? d) Now instead of assuming T = T̅ , assume that T = T̅ +...
In a closed economy, the consumption function is: c = 1.15 + 0.75(y - t) billions...
In a closed economy, the consumption function is: c = 1.15 + 0.75(y - t) billions of 1992 dollars. The tax function is: t = 0.1y + 0.1 billions of 1992 dollars. Planned investment is $1 billion and planned government expenditures are $1.5 billion. Calculate: The equilibrium level of real GDP. 2. Consumer expenditure 3. Saving 4. The investment multiplier 5. The government budget deficit 6. The leakages from and injections into the circular flow of income and expenditure. Do...
In the Keynesian cross model, assume that the consumption function is given by C=120+0.8(Y−T). Planned investment...
In the Keynesian cross model, assume that the consumption function is given by C=120+0.8(Y−T). Planned investment is 200; government purchases and taxes are both 400. Y, C, I G&T are all in billions. 1. Graph planned expenditure as a function of income. 2. What is equilibrium income? 3. If government purchases increase to 420, what is the new equilibrium income? What is the multiplier for government purchases? 4. What level of government purchases is needed to achieve an income of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT