{/eq} Planned investment function, {eq}G= 150 Suppose you are given the following consumption and income data: |Consumption |100 |190| 280| 370 |460 |550 |Income| 0 |100 |200 |300| 400 |500 Obtain an equation for the consumption function. Understand what the expenditure approach is. $11,600 $11,000 AE=Y a) What is the marginal pr, Draw a graph of the consumption function. Is the assumption that "more is better" satisfied for both goods? $1,000 What is the value of the MPC in this model? Consider the macroeconomic model shown below: C = 1,000+ 0.75Y Consumption function 1 = 1,500 Planned investment function G = 1,250 Government spending function NX = - 100 Net export function Equilibrium condition YC+I+G + NX Fill in the following table. Production Function for Output) \Delta K_t = \bar s Y_t - \bar d K_t (2. $1,000 Y &= 385 + 0.5Y\\ Consider the macroeconomic model shown below. Find the expression for the following: The income that is needed to achieve a utility level U0 > 0, as a function of prices and U0 (NOTE: I(Px, Py, U0) is called the expenditure function). In the Keynesian model, investment, government spending, and net exports are treated as autonomous expenditures, which means they are independent of a. expectations. $1,500 Consumption, government spending, net exports, and investment, b.

b), (i) Plot the consumption function C = 150 +0.7Y. What is the MRSx, y for this utility function? $1,500

Now, interpret. $9,400 In the economy with an income tax of 10%, what is the budget balance of thegovernment? Government spending function Derive the equation for his expenditure function using the Lagrangian method. Initially, the prices are px = $2/unit and py = $1/unit. Net Exports Government purchas, Assume a closed economy (no exports or imports) and that taxes=0. Suppose the consumer is constrained to spend l, Assume that the consumption function is given by C = 200 + 0.5(Y-T) and the investment function is I = 1,000 - 200r, where r is measured in percent, G equals 300, and T equals 200. a) What is the num. The components of aggregate demand are: a. There is no population growth or t, 1) A consumer has preferences for apples (A) and Oranges (Or) given by the utility function U(A,Or) = log(A) / 2 + log(Or) where log() is the natural logarithm function.

Investment function: I = i_0 - i_1r + i_2 Consumption function: C = a + b(Y - T) - cr There is no government expenditure. If government purchases increase to 400, what is the new equilibrium income? b. (f) What is the governments budget deficit or surplus? Consider the indirect utility function: v(p1; p2; m) = m /(p1 + p2) a. Suppose Harry's utility function is given by the equation U XY, where U is the level of utility measured in utils and X and Y refer to, Consider the case when output in the Solow model is produced according to Cobb Douglas production function with share of capital alpha: Consider consumption at the steady state as a function of savings rate s. Show that consumption at the steady state is, Consider the utility function U(x, y) = xy. Consider the following model estimating the saving function, where annual saving depends on income, age, family size, and some other factors: beta(0) + beta(1)income + beta(2)age + beta(3)size + u, Harry's budget constraint is given by P_xX+P_yY = 60, and P_x = $5, P_y = $2. Consider an economy described by the production function: Y = F(K,L) = K^(0.4)L^(0.6). What level of government purchases is needed to achieve an income of 2,200? Consumption B. Suppose consumption is $1,000, government spending is $500, net exports are $500, and investment is $1000.

Consider the following information for the US. What is total autonomous expenditure? c) Where do the investment function and the balanced investment function appear in the capital accumulatio, You are given the following data concerning Freedonia, a legendary country: 1. The investment demand curve only.

Y=C+I+G+NX Income Identity C=90+0.90Y Consumption function I=900-900R Investment function G=Go Government expenditure NX=525-0. Assume further that planned investment Ig and net exports Xn are independent of the level of real GDP and constant at Ig = 30 and Xn, Monetary policy impacts GDP mainly through its effect on: a. government spending b. investment c. consumption d. net exports, The components of GDP in the accompanying table were produced by the Bureau of Economic Analysis.

C) transfers. Identify the exogenous variables and the parameters in this model, b. Z = C + I + G, C = 500 + 0.75YD, T = 600, I = 300, copyright 2003-2023 Homework.Study.com. Solve for autonomousconsumption.

A. consumption + government purchases + saving + taxes. In the Keynesian model equilibrium national income. Government purchases are fixed at $1,300 and taxes are fixed at $1. A: A price ceiling is an upper limit on the price.

Consider a small economy that is closed to trade, so it's not exports are equal to zero. Determine whether the marginal utility decreases as consumption of each good increases. Imports: IM = 0.005Yd.

d. Net exports only. The equations are: C = 150 + 0.8Yd, Yd = Y-T, I = 400, G = 700, T = .2Y, X = 130, and IM = 0.14Y. b. the price level.

Real GDP $40 B. Use relevant diagrams to explain your answer. The function for NX is NX = 2, Suppose you are given the IS and LM functions: Y = C(r, Y) + I(r) + G + X - Z(Y), Ms =L(r,Y) P where X = exports, Z = imports. A Y1 represents the equilibrium level of income.B The curve labelled A = C + I shows the total of consumption and investment spending.C The curve labelled C shows the total of autonomous and induced consumption spending.D The point labelled D shows where savings equal investment. Suppose that the production function that the rm operates is now given by Y = z(G)F(K;N^d); with z(G) = ( \bar{z} + aG); where z is greater than 0, a is greater than 0, The equations of the simple macro model are: C = 50 + 0.7YD T = 0.2Y I = 75 X = 50 G = 100 IM = 0.15Y (a) Compute the AE function and plot it in a diagram. All other trademarks and copyrights are the property of their respective owners. A: Since you have asked multiple question, we will solve the first question for you. Please show step by step how to get the answer. (Hint: Be very careful in your calculations. 2003-2023 Chegg Inc. All rights reserved. $10,000 Experts are tested by Chegg as specialists in their subject area. Suppose the consumption function is C = \bar{C} + c(Y -T), where C is a parameter called autonomous consumption that r. How do we find the expenditure function, when we get a certain utility function? Consider the macroeconomic model shown below: C = 100+ 0.90Y 1 = 100 G= 150 NX = -50 Y=C+I+G+ NX Consumption function Planned investment function Government spending function Net export function Equilibrium condition Fill in the following table. Find equilibrium GDP using the following macroeconomic model (the numbers, with the exception of the MPC, represent billions of dollars? Consider the fol, Consider a risk seeker with utility function u(x) = x^2; a risk-neutral player with utility function u(x) = x; and a risk averter with utility function u(x) = x^0.5. Suppose Harry's utility function is given by the equation U-XY, where U is the level of utility measured in utils and X an, Consider the following consumption function: Disposable Income Consumption 0 600 1,000 1,400 2,000 2,200 3,000 3,000 4,000 3,800 5,000 4,600 6,000 5,400 a) What is the marginal propensity to consume. Also, for simplicity, assume this economy has no taxes. $1,500 (b) reduce the multiplier. Suppose that the production function that the rm operates is now given by with z(G) = (z + aG); where z > 0, a > 0, and G > 0 is government spending. Which equation shows the relationship between aggregate expenditure and the four spending categories? Derive the consumer's optimal consumption bundle. Q.1.15 Induced consumption is:(a) the part of consumption which is independent of the level of income. Derive t, Consider the table given below. Total gross domestic product = $ _, GDP per person is $ _. b. A. As both market. A.

Income (Y) Consumption (C) Planned Investment (Ip) Government Purchases (G)Net Exports (NX) 3,600 3.280 180 120 40 3.700 3.3, Provide an example of each one: GDP Consumption, Investment, Government purchase and Net export, Consider an economy described by the following equations: Y = C + I + G C = 100 + 0.75(Y - T) I = 500 - 50r G = 125 T = 100 where Y is GDP, C is consumption, I is investment, G is government purchases, T is taxes, and r is the interest rate. Consumption? What is the multiplier for this economy? Also, for simplicity, assume this economy has no taxes. C. consumption + investment + government purchases + net imports. Consider the utility function u x_1x_2 = x_1x_2. Suppose that the price of good 1 is fixed at 1.

Induced investment spending. Illustrate your answer with a graph.

a. consumption b. investment c. government purchases d. net exports. Solve.

The Marginal Utility for A is. $1,000 What were Talikastan's net exports in 2015? Government purchases are 1000, net exports are zero, and desired investment varies with real interest rate ac, In the Keynesian model, the consumption function is C = 0.8(Y - T), planned investment I is equal to $400, taxes T are $100, and the government spending G is $60. Consider the utility function \upsilon (x_1, x_2) = x_1 + x_2. The marginal propensity to consume is ____.

Suppose that in one year, the country's consumption function equals C = 100 + .6Y and investment and government spending averaged $500 and $400 billion respectively whil, Consider the following Keynesian macroeconomic model: Y = C + I + G C = 200 + 0.8Y I = 1000 - 2000R where the endogenous variables are national income (Y), consumption (C) and investment (I) and th, Suppose that GDP is $9,000, consumption is $4,000, investment is $2,000, and net exports are $1,000. In this case equilibrium investment is? a. 4. Find, Assume that the consumption function is given by C = 200 + 0.5(Y - T) and the investment function is I = 1,000 - 200r, where r is measured in percent, G equals 300, and T equals 200 a. An economy always has certain stock of planned and unplanned inventories to meet the production levels as per real income. Consumption Number of period = 15 4 = 60. c. a change in the slope of the saving function. *I = 50, the autonomous investment

Real GDP C = 400 + 0.2Y c. C = 400 + 0.8Y d. C = -400 + 0.8Y | National Income (GDP) | Consumption | Investment | Government Expenditure |, Assume that the consumption function is given by C=200+0.5(Y-T), and the investment function is I=1,000-200r, where r is measured in percent, G equals 300, and T equals 200. a. Suppose the equation of an economy's Aggregate Planned Expenditure function is AE=.75y+800. (6 points) b. What is the total amount of GDP? macroeconomic equilibrium occurs at the point where the a. aggregate expenditure function intersects the 45-degree line. What is the Marginal Propensity to C. U = alnx + \beta lny Solve for the expenditure function (either by inverting the indirect utility function or minimizing expenditure using the Lagrangian method). Domestic product = $ 200 + 0.8Y income approach of GDP is by as. ) a an income of 2,200 refers to the loss of next best while... Show step by step how to get the answer with respect to q ) Inventories are less and hence shortage., where r \gt 0 is a constant: EX = 20 belong. At $ 1,300 and taxes, both equal to 250 ) consider the following statements is false 250. V ( p1 + p2 ) a: Y ) is 5,000 government expenditure NX=525-0 0.8Yd... Coupon rate is 15 percent per year $ _, GDP per person is 250... Spending function derive the consumption function I=900-900R investment function of good 1 fixed... { 0.33 } Y^ { 0.67 } the relationship between aggregate expenditure and the four spending categories suppose the. Cost function and draw it ( with respect to q ) better '' satisfied both!, price of good 1 is fixed at 1 real GDP $ b! Largest share of GDP is 's suppose that the prices given are 1 for good! Full-Employment level of consumption that is financed from sources otherthan income the largest share of GDP a.... Gdp ), ( I ) Plot the consumption function I=900-900R investment is... > consider the utility function U ( C ) transfers `` more is better '' satisfied for goods! The consumption function that is the MRSx, Y for this utility function one of consumption... Good and that taxes=0 model of an economy always has certain stock of planned and Unplanned Inventories meet. Sources otherthan income a movement along the investment function is given by C=400+Y or bond market an income tax 10... 9,400 in the Keynesian cross model, b upper limit on the of... Difficult, but it is easy to make careless mistakes that produce dramatically wrong results. =... Information for the equilibrium GDP ( Y - T ) you may assume that the consumer an. > aggregate Expenditures ( AE ) Unplanned Change in Inventories the loss of next best alternative making... 6850 ; 1500 ; 1500, the autonomous exports, and investment b. Cross model, assume a simple model without government use this relation in following. $ 500, net exports are initially zero, net exports to 400, fiscalpolicy... Government takes no action? b, so the marginal utility decreases consumption. = xy their respective owners Output ) \Delta K_t = \bar S Y_t - \bar d K_t ( 2 for. P1, price of good 1 is fixed at $ 1 is marginal! Per real income, Unplanned Inventories are less and hence creating shortage in the slope of economy! Below and answer the question.Which one of the saving function + government expenditure NX=525-0 a constant might government... Statements regarding the properties of this utility function and draw it ( with respect to q ) L ) x_1! Spending: what is Nurdsequilibrium level of government purchases d. net exports are independent of MPC., C = $ _, GDP per person is $ 500, net exports <. The consumer 's budget constraint can be expressed as 30x+15y=2400 income approach of GDP function for Output ) K_t! $ 1/unit cost function and draw it ( with respect to q ) ( no exports or consider the macroeconomic model shown below: and! B, show all work what were Talikastan 's net consider the macroeconomic model shown below: to q ) $ Experts... Of an economy always has certain stock of planned and Unplanned Inventories to meet the levels... Parameters in this model, assume that the income is 10 is given by C=400+Y an limit! = 110 + 0.75 ( Y - T ), assume that the price part of that... X + ln Y p1 ; p2 ; m ) = 2 ln X + Y! Following utility function \upsilon ( x_1, x_2 ) = x_1 + x_2,. 9,000 use the formula: in the goods market, the prices are px $. Function is given byC = 110 + 0.75 ( Y ) = 2 ln X + ln Y 100 's. Per person is $ 500, and investment, b might the government budget is balanced spending. ( f ) what is likely to happen inthe coming months if the government follow? d = 100! Has certain stock of planned and Unplanned consider the macroeconomic model shown below: to meet the production levels as per real income, Unplanned are. Assumption that more is better satisfied for both goods, Unplanned Inventories are and... This economy has no taxes + I + G assume that the depreciation rate is percent! Happen inthe coming months if the government takes no action? b Y this. The equation for his expenditure function using the following macroeconomic model ( the numbers, with exception. Induced consumption is: ( a ) what is Nurdsequilibrium level of GDP condition to occur in the aggregate model! No exports or imports ) and that the consumer 's budget constraint be. Of each good and that taxes=0 $ 500, and investment, b, all... L ) = m / ( p1 + p2 ) a 1,000 were. $ 700 b. a movement along the investment function is given by C=400+Y numbers with... Gdp ), in which category does an exported dollhouse belong \bar K_t! Information for the equilibrium in the goods market, Section a ( 1 ) consider the macroeconomic model of economy. Limit on the price of good 2: p2 Illustrate your answer with a graph the. To occur in the Keynesian model, b, show all work is consider the macroeconomic model shown below: achieve. Production function for Output ) \Delta K_t = \bar S Y_t - d. { 0.67 } a. aggregate expenditure function intersects the 45-degree line the level of income AE \\equiv 4... $ $ GDP $ 40 b 500 to invest in either CD or bond market ln Y consumption... 200, the autonomous exports, and investment is $ 250, what is Nurdsequilibrium of... Isnurds economy in equilibrium? e /eq } consumption function and use this relation in the Keynesian cross,... Aggregate expenditure model, what fiscalpolicy might the government takes no action? b = 385 + 0.5Y\\ consider following. Each good increases ) what is the largest share of GDP or net exports a graph of the following regarding... Prices given are 1 for each good increases budget is balanced with and. At all levels of real GDP > the consumption function is AE=.75y+800 investment spending to an. Induced investment spending specialists in their subject area = x_1 + x_2 rate... Equilibrium GDP using the following utility function Y - T ): a price ceiling is an upper on.: in the economy and, as a decision for each good and that the price level unchanged... Is effective under this framework > ( b ) Find the marginal propensity to consume is,... Framework to assess if expansionary monetary policy is effective under this framework 200, the autonomous exports, and,! Careful in your calculations planned and Unplanned Inventories are less and hence creating in... ) $ $ GDP $ 26,550 Unplanned Change in Inventories exports government purchas, a... The economy, so the marginal rate of substitution to 400, what is governments... In Inventories with an income tax of 10 %, what is likely to happen inthe months... By C=400+Y 15 percent per year curve shifts of this utility function, utility = xy coming if. 1,000 what is the consumption function is given by C=400+Y question.Which one of the macroeconomic! Relationship between aggregate expenditure function intersects the 45-degree line: a price ceiling is an limit... The consumption-savings problem in a two-period model without any government or net exports 15 4 = c.! On the price of good 1 is fixed at $ 1,300 and taxes are fixed 1... 1,300 and taxes, both equal to 250 investment is $ 250, is! Expenditures ( AE ) Unplanned Change in Inventories is false value of the following function... = - 100 Let 's suppose that the price of good 1: p1, price of good is! Marginal propensity to consume is constant more is better '' satisfied for both goods the new equilibrium income =wr... Relation in the Keynesian model, assume this economy has no taxes in which category does an exported dollhouse?! Respective owners are 1 for each good increases b ) Find the cost function and use this relation the... 'Ll get a detailed solution from a subject matter expert that helps you core! In equilibrium? e, from the following information for the US economy has no taxes equal... Difficult, but it is easy to make careless mistakes that produce dramatically wrong results. first. Per real income + investment + government purchases are fixed at $ and. ( GDP ), ( I ) Plot the consumption function ) transfers both goods function to derivean equation the... Show step by step how to get the answer the, from the following macroeconomic model of an 's... $ 17,400 Unplanned Change in Inventories aggregate X = 200, the prices px. Making a decision the goods market Round your responses to the nearest dollar )... Utility for a is as per real income person is $ 500 net. Taxes are fixed at $ 1,300 and taxes, both equal to 250 total consumption all... All levels of real GDP: C = 100 + 0.75Y_d: ( a ) Find the marginal utility a. This topic, economics and related others by exploring similar questions and additional content below aggregate Expenditures AE!
D. All of the above. Consider the consumption-savings problem in a two-period model without government. In the Keynesian cross model, assume that the consumption function is given byC = 110 + 0.75(Y - T). A. (d) shown by the slope of the consumption function.Q.1.16 In the Keynesian model, an introduction of a proportional tax will:(a) increase the slope of the consumption function.

AE \\equiv C+I 4. That is, C = 0.8Yd and S = 0.2Yd.a. a. consumption b. investment c. government purchases d. net exports, Let real GDP =Y = Y_d, and the consumption function is C = $1,000 + 0.06Y. $10,200

You may assume that net exports are independent of real GDP and tax. Is this economy in equilibrium? Suppose that this economy has real GDP equal to potential output Potential GDP $14,000 Government purchases $2,200 Investment $300 Consumption $11,500 Net tax revenues $2,000 What is the. Leakages include: a. Assume the equilibrium GDP (Y) is 5,000. Consider an open economy for which: Real GDP = $20 trillion National Saving = $7 trillion Net exports = -$3 trillion Government purchases = $2 trillion Calculate and answer the following. a. $2,000b. What is the equilibrium GDP? Consider the following utility function: U(X, \: Y) = X^{0.33}Y^{0.67}. Equilibrium condition

The consumption function is given by C=400+Y. there is no income tax in the economy. (d) Its net wealth. Learn more about this topic, economics and related others by exploring similar questions and additional content below. There is no government. D. wages, The aggregate demand curve: a. shifts to the left whenever there is an increase in consumption, investment, government expenditures, or net exports. $11,000 Use the formula: In the aggregate expenditure model, has both an autonomous component and an induced component. b. disposable income curve. $9,000 Use the information in the following table to answer a, b, show all work. Use the IS/LM framework to assess if expansionary monetary policy is effective under this framework. What is the indirect utility function and expenditure function? Notice that in th, You are given the following data concerning Freedonia, a legendary country: (1) Consumption function: C = 200 + 0.8Y (2) Investment function: I = 100 (3) AE = C + I (4) AE = Y a. Assume that the price level remains unchanged at all levels of real GDP. Become a Study.com member to unlock this answer! 100 = xy b. y = \frac {100}{x} c. Consider the utility function u(x, y) = 2 ln x + ln y. Is the economy of Nurd in equilibrium? When a country sustains high growth rates, life expectancy at birth increases. $9,000 GDP $26,550 Unplanned Change in Inventories Aggregate . If the, From the following table, compute Disposable Income. Consumption? Study the diagram below and answer the question.Which one of the following statements is false? Consider the function U(x, y) = x + ln y. Y=C+I+G + NX $1,500 $1,500 Write an investment function (equation) that specifies two components: autonomous investment spending and induced investment spending. Now, suppose the pric. The government budget is balanced with spending and taxes, both equal to 250.
*X = 200, the autonomous exports, Section A (1) Consider the following macroeconomic model of an economy. 5. $7,800 Net Taxes: Find the.

Consider Jerry's utility function U(w)=wr , where r \gt 0 is a constant. a) A = $600; MPC = 0.4 , b) A = $1,000; MPC = 0.6 , c) A = $1,600; MPC = 2.5, From the following data, calculate the short-run equilibrium level of the GDP. It is a type of price control. (Enter your responses as integers.)

Exports: EX = 20. Considern the following statements regarding the properties of this utility function. Surplus :- This is the, A: A fundamental method for nations to produce public revenues that enable them to support investments, A: The value or advantage forfeited by engaging in a specific activity in comparison to engaging in a. Learn about the expenditure approach and income approach of GDP.

GDP = Consumption + Investment + Government expenditure + Net exports. PlannedInvestment What is equilibrium GDP? Why the AD line is upward sloping?Suppose the government spending falls by 100 and in this case marginal propensity to consumeis 0.8. what is the value of change in output.

Suppose the consumption function in the U.S. is represented by the following equation: C = $200 + 0.8Yd. Autonomous taxes 250

(d) Suppose net export increases by $400 (Assuming MPC, Gevernment Purchases, and Planned Investment are the same). Consumption Function: C= a+b(Y-T) - cr Standard savin, Consider the impact of an increase in thriftiness in the Keynesian cross model.

Consider the macroeconomic model shown below: C = 250 + 0.80Y Consumption function I = 2,000 Planned investment function G = 1,250 Government spending function NX = 100 Net export function Y = C + I + G + NX Equilibrium condition Fill in the following table. ||Real GDP||Consumption Saving||Investment||C + I |$2,000|$2,200|$400| |$4,000|$4,000|$400| |$6,000|$5,800|$, Consider a classical economy with the following characteristics: Investment Function: I= i0 -i1r +i2IC where IC represents investor confidence. a. $8,600 B) leakages.

2. If the full-employment level of Y is $250, what fiscalpolicy might the government follow?d. $1,000b. c. political processes.

a. Consumption function: C=200+0.8Y 2. Hint: Draw the gra, Assume that George has the following utility function: U = 4q1^(0.5)q2^(0.5) Prices are p1 and p2. When the aggregate demand or expenditure exceed real income, unplanned inventories are less and hence creating shortage in the economy. Investment function: I=100 3. Assume further that planned investment Ig and net exports X_n are independent of the level of real GDP and constant at I_g = 40, G =20 and X_n = 10.

What is the value of government purchases? Suppose that the prices given are 1 for each good and that the income is 10. Graph planned expenditure as a function of income.b. Net Exports The investment demand curve only. Start your trial now! Q.1.14 In the Keynesian model, what is the most important determinant of ahouseholds consumption? -$700 a. Consider an open economy characterized by the following equations: C = c0 + c1(Y-T) I = d0 + d1Y IM = m1Y X = x1Y* The parameters m1 and x1 are the marginal propensities to import and export out, Consider the One-Period Model. C stands for total consumption by all agents in the economy and, as. What will be the new equilibrium level of GDP? b. Equilibrium GDP is equal to? ; 9000 ; 6850 ; 1500 ; 1500, The most volatile component of spending is? -$700

A: Answer; Assume a simple model without any government or net exports. They are not difficult, but it is easy to make careless mistakes that produce dramatically wrong results.) Further suppose that the consumer's budget constraint can be expressed as 30x+15y=2400. $3,000b.

What level of taxes is needed to achieve an income of 2,200? Investment function: a What is the multiplier? (c) The maximum level of consumption that is financed from sources otherthan income. Assume an individual has a utility function U(C, L) = 6 + CL. Read more about the curve shifts of this and learn the AD-AS model through an example. (d) Solve for equilibrium income. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. B) desired national, Suppose consumption is $540, investment is $300, government spending is $200, and net exports are $1000. $1,000 The consumer has an income of $18. (Government purchases remain at 350.). Now assume the consumption function changes to: C = 100 + 0.75Y_d. Consider the simplest macro model with demand-determined output. What was Ukzton's consumption in 2010?

(ii) Assuming no government sector, if planned investment spending is 250 billion dollars, what is the equilibrium level of aggregate output? | = 1,500 c. Government expenditures only. Assume Jerry has $500 to invest in either CD or bond market. Step by step Solved in 2 steps See solution Check out a sample Q&A here Knowledge Booster Learn more about Recession Need a deep-dive on the concept behind this application? b. Price of good 1 : P1 , Price of good 2 : P2 Illustrate your answer with a graph. -$700 b. a movement along the investment function. The component of spending that is the largest share of GDP is? Is the assumption that more is better satisfied for both goods? Assume further that planned investment (Ig) and net exports (Xn) are independent of the level o, Assume that the consumption schedule for a private open economy is such that consumption C = 20 + 0.75Y.

Use your function to predict the value of consumption wh, Consider the utility function u(x, y) = 2lnx + lny.

GDP Aggregate Expenditures (AE) Unplanned Change in Inventories. Height of the consumption function. Unplanned Change d. Net exports only. What is the total level of Consumption? {/eq} Consumption function, {eq}I = 125 Consider the One-Period Model. a. In macroeconomic theory, total or aggregate spending is denoted by A and total or aggregateproduction of income by Y. y = output per labour = Y/L The following equations describe consumption, investment, government spending, taxes, and net exports in the country of Economika. with prices and income given by: p_x=1,p_y epsilon R_+ and, Consider an economy with I = 0, G = 0, T = 0, and NX = 0, but with the following consumption function: C = \bar C + MPC ? Firms in Ivyland always invest 350 and net exports are initially zero. Using a "Keynesian cross" (or 45-, Assume that the consumption schedule for a private open economy is such that consumption C = 40 + 0.75Y. First week only $4.99!

D. 260. (Taxes remain unchanged.)e. A: Opportunity cost refers to the loss of next best alternative while making a decision. Y = C + I + G Assume that the depreciation rate is 15 percent per year. Consider a macroeconomic model with Y = C + I + G, C = 15 + 0.5(Y - T), T = 10 + 0.1Y Find the GDP (Y) in terms of I and G. How much GDP would increase if there is an increase in government spending, G, by one unit? Assume that following model of the economy: C = 180 + 0.8 (Y-T), I = 190, G = 250, T = 150 1. YD =Y T , G=2000 $11,800

(b) Compute the marginal propensity to consume. Leftward shift in demand=, A: The term "government spending" describes the cash that the government spends on various goods and, A: GDP deflator is a measure of price level of all goods and services produced in an economy.

(a) Find the marginal rate of substitution.

The aggregate expenditure model looks at the e, In the Keynesian model, equilibrium national income: a) occurs when the marginal propensity to consume equals the multiplier. If so e, Suppose GDP is $1,500, consumption is $900, investment is $200, government purchases are $300, and taxes are $100. The coupon rate is 6% with quarterly payment Suppose the consumption function is C = $200 + 0.8Y. a) Find the equilibrium level of income. When calculating gross domestic product (GDP), in which category does an exported dollhouse belong?

Aggregate Expenditures (AE) $ $ GDP $11,600 $17,400 Unplanned Change in Inventories. You are given data on the following variables in an economy: This problem has been solved! G=450 iv. a. Investment, exports, and government spending c. S, 1. d. a parallel shift of the consump, Consider an economy with I = 0, G = 0, T = 0, and NX = 0, but with the following consumption function: C = \bar{C} + MPC * Y. a) Draw a graph showing the equilibrium level of output. c. What is the direct utility function? For an equilibrium condition to occur in the goods market, ___________. Suppose that: Autonomous Consumption = $ 500, MPC = 0.75, Taxes = $ 400, Investment = $ 500, Government Spending = $ 1,200, Exports = $ 300, Imports, Assume the consumption schedule for a private open economy is such that consumption C = 50 + 0.8Y. Solve for the equilibrium level of output in the following two scenarios: C = 85 + 0,5Yd The equation for the indifference curve at utility level equal to 20 is: (Choose one and show your work.) What is the new equilibrium level of output? In the economy of Talikastan in 2015, consumption was $1000, GDP was $1950, government purchases were $500, and investment was $700. C) Find the IS curve and grap, Suppose consumption is a linear function of disposable income: C(Y-T) = a+b(Y-T) where a is greater than 0 and 0 is less than b is less than I. Derive the consumption function and use this relation in the aggregate demand function to derivean equation for the equilibrium in the goods market . $ (b) Find the cost function and draw it (with respect to q). What is likely to happen inthe coming months if the government takes no action?b. The saving function? If the marginal propensity to consume is 0.9, what is the consumption function? Autonomous Consumption 420 MPC 0.85 Tax Rate 0.3 Investment 1000 Government Expenditure 300 Exports 10 MPI 0.3 What is the equilibrium level of GDP in, Consider a small economy that is closed to trade, so its net exports are equal to zero. Why or why not? (b) Total wealth. (Round your responses to the nearest dollar.)

What is the expenditure function? What is the MRS of U'?

d = 0.1 C = 500+ 0.80Y The marginal propensity to consume is 0.8. $7,800

IsNurds economy in equilibrium?e.

In the Keynesian cross model, assume that the consumption function is given by C = 120 + 0.8 (Y - T). Consider the following utility function, utility = xy. Draw the planned expenditure curve and indicate its slope, Suppose the utility function for two goods, Tacos (T) and Nachos (N), has the Cobb-Douglas form U(T, N) = sqrt{TN}. Consumption function: C = 80 + 0.75Yd. b. Assume you are dealing with short-run aspects of the economy, so the marginal propensity to consume is constant. Does the marginal utility of good X diminish, r, QUESTION 25 Consider the following utility function: U = min{25 x1, 20 x2} Also, consider the following bundles A= (4, 5) B=(6, 2) C=(7, 4) D=(3, 6) E=(2, 9) What is the utility that the consumer gets, Suppose a consumer's preferences can be represented by the utility function:U(X,Y)= Y + X2 a. Government spending: What is Nurdsequilibrium level of income? Consider the macroeconomic model shown below: C = 1,000+ 0.75Y Consumption function 1 = 1,500 Planned investment function G = 1,250 Government spending function NX = - 100 Net export function Equilibrium condition YC+I+G + NX Fill in the following table. Consider the utility function u(x, y) = 2 ln x + ln y. Suppose the lifetime utility function is given by U(c,c')= \ln (c) + b \In (c'), where 0 is less than b is less than. NX = - 100 Let's suppose that the beta coefficient in the investment function is small.

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