Question 2
Net export (NX =X-IM), where X is export and IM is import. Now
assume...
Question 2
Net export (NX =X-IM), where X is export and IM is import. Now
assume that the proportion of additional income that is spent on
import is 0.1, this is called the marginal propensity to import
(mpim)). This is similar to the MPC.
Assume that import depends on income such that the total import
is IM=0.1(Y) here 0.1 is mpim.
Let C=1000+0.5Yd, I=300, G=200, T=100 and X=300.
Yd=Y-T+TR and TR=200. Note that T and TR represents
Taxes and transfer...
The following is a model that describes the economy of Ghana
with all values in (GHȼ...
The following is a model that describes the economy of Ghana
with all values in (GHȼ million).
Y = C + I + G + X – M
C = 1200 + 0.9Yd Yd
Yd = Y – T
T = 200 + 0.1Y
I = 300
G = 1000
X = 600
M = 400 + 0.1Yd
(where Y is national income, C is consumption, G is government
spending, X is export, M is import, Yd is disposable income...
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...
Income
(Yd)
Consumption
Expenditure
Saving
Investment
Expenditure
Government
Expenditure
Net Export
Expenditure
Aggregate
Expenditure
$8000...
Income
(Yd)
Consumption
Expenditure
Saving
Investment
Expenditure
Government
Expenditure
Net Export
Expenditure
Aggregate
Expenditure
$8000
$11,000
$2,500
$5,000
$12,500
12,000
14,000
2,500
5,000
12,500
20,000
20,000
2,500
5,000
12,500
30,000
27,500
2,500
5,000
12,500
50,000
42,500
2,500
5,000
12,500
100,000
80,000
2,500
5,000
12,500
Calculate savings, MPC, MPS, break even income, and the
equilibrium level of income (Y = AE = C + I + G +NX) in the above
given information.
Draw a graph showing disposable income (Yd)...
Y = C + I + G + (X – M)
C = C0 + (mpc)(DI)...
Y = C + I + G + (X – M)
C = C0 + (mpc)(DI)
I = I0 + (mpi)(Y)
M = M0 + (mpm)(DI)
DI = Y – T
T = (t)(Y)
Where Y is the level of real GDP in the economy, DI denotes the
disposable income in the economy, C represents the level of
consumption in the economy, C0 is the autonomous consumption level,
mpc denotes the marginal propensity to consume, I is the level of...