Question

For the following economy, find autonomous expenditure, the multiplier, short-run equilibrium output, and the output gap....

For the following economy, find autonomous expenditure, the multiplier, short-run equilibrium output, and the output gap. By how much would autonomous expenditure have to change to eliminate the output gap?

C = 450 + 0.75 (Y – T )
I p = 200
G = 140
NX = 60
T = 100
Y* = 3,200

Instructions: Enter your responses as absolute numbers.

Autonomous expenditure:   

Multiplier:   

Short-run equilibrium output:   

There is  (Click to select)  a recessionary  an expansionary  no  output gap in the amount of  .

Autonomous expenditure would need to   (Click to select)  decrease  stay the same  increase  by  to eliminate the output gap.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
C = 3,500 + 0.5(Y - T) I = I0 = 1,000 G = G0 =...
C = 3,500 + 0.5(Y - T) I = I0 = 1,000 G = G0 = 2,000 X = 600 IM = 400 T = T0 = 2,000 Yp = 10,000 Note: Keep as much precision as possible during your calculations. Your final answer should be accurate to at least two decimal places. a) Find autonomous expenditure. Autonomous Expenditure = $0 b) Find the multiplier. Multiplier = 0 c) Find short-run equilibrium output. Short-run Equilibrium Output = $0 d) Find...
28- If autonomous spending rises, the expenditure equilibrium will rise by the increase in autonomous spending....
28- If autonomous spending rises, the expenditure equilibrium will rise by the increase in autonomous spending. the expenditure equilibrium will increase by the level of GDP times the expenditure multiplier. the expenditure equilibrium will fall by the increase in autonomous spending. the expenditure equilibrium will rise by the increase in autonomous spending multiplied by the expenditure multiplier. 31- An example of fiscal policy is an increase in autonomous spending by consumers. an increase in social security spending by the elderly....
An economy is in long-run macroeconomic equilibrium, with output at Yp, when the following aggregate demand...
An economy is in long-run macroeconomic equilibrium, with output at Yp, when the following aggregate demand shock occurs: The quantity of money in the economy declines and interest rates increase. What kind of gap (inflationary or recessionary) will the economy face after the shock, and what type of fiscal policies would help move the economy back to potential output? This will cause an inflationary gap; an expansionary policy should be used. This will cause a recessionary gap; an expansionary policy...
Consider an economy in the short-run described by the following equations: Z = C + I...
Consider an economy in the short-run described by the following equations: Z = C + I + G G = 500 T = 500 C = 250 + 0.75(Y – T) I = 425 + 0.05Y a. Solve for equilibrium output Y. b. What is the value of the expenditure multiplier now? Why would the expenditure multiplier be bigger? c. Now, if G increases to 600, by how much will Y increase? d. Suppose that bo= 425 increases to 525....
The components of planned aggregate spending in a certain economy are given by Consumption Function: C...
The components of planned aggregate spending in a certain economy are given by Consumption Function: C = 800 + 0.75(Y - T) – 2000r Planned Investment: I p = 400–3000r Government Revenue and Spending: T = 300 and G = 450 Net Export: NX = 75 where r is the real interest rate (For example, r = 0.01 means that the real interest rate is 1 percent). (1) Find the level of public saving. (2) Suppose that the real interest...
3. The components of planned aggregate spending in a certain economy are given by Consumption Function:...
3. The components of planned aggregate spending in a certain economy are given by Consumption Function: C = 800 + 0.75(Y - T) – 2000r Planned Investment: Ip = 400–3000r Government Revenue and Spending: T = 300 and G = 450 Net Export: NX = 75 where r is the real interest rate (For example, r = 0.01 means that the real interest rate is 1 percent). (1) Find the level of public saving. (2) Suppose that the real interest...
In macro short run equilibrium Economy is in a recessionary period Economy is in an inflationary...
In macro short run equilibrium Economy is in a recessionary period Economy is in an inflationary period Either recessionary or inflationary period Not enough information Which of the following would lead to change in Investment ? Current level of income Change in expenditure Change in the interest rate All of the above.
Consider an economy in the short-run described by the following equations: Z = C + I...
Consider an economy in the short-run described by the following equations: Z = C + I + G G = 500 T = 500 C = 250 + 0.75(Y – T) I = 625 a. What is the equilibrium condition that allows us to solve for Y. Find Y. Compute private saving, public saving and total/national saving at this level of Y. b. What is the value of the marginal propensity to consume? What is the value of the expenditure...
1. The intended goal of expansionary fiscal policy is: A. an increase in interest rates B....
1. The intended goal of expansionary fiscal policy is: A. an increase in interest rates B. an increase in the price level C. a reduction of distribution of income inequality D. an increase in the level of aggregate output 2.If we assume that there are 100 households in the economy and that total income to be distributed across those households is $4000 (per day) and if the 20% poorest households earn $15 per day and the 60% middle income households...
The short-run equilibrium in the output market is achieved when the value of income from production...
The short-run equilibrium in the output market is achieved when the value of income from production (output) Y equals the value of aggregate demand D, which is a function of the real exchange rate, disposable income, investment expenditure and government purchases, i.e., Y = D(EP*/P, Y-T, I, G). The DD schedule shows combinations of output and exchange rate at which the output market is in short-run equilibrium. a) Why does the DD schedule slope upward? b) List the factors which...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT