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 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.

Answer #1

Answer:-

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, 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 = 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 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 = 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 + 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 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 + 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 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 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

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 1 minute ago

asked 1 minute ago

asked 1 minute ago

asked 1 minute ago

asked 2 minutes ago

asked 4 minutes ago

asked 7 minutes ago

asked 8 minutes ago

asked 12 minutes ago

asked 12 minutes ago

asked 13 minutes ago

asked 13 minutes ago