For a given nation, suppose the following table shows the relationship between real consumption and real disposable income (real GDP):
Real Consumption ($) Real Disposable Income=Real GDP($)
120 100
200 200
280 300
360 400
440 500
520 600
Assume autonomous real investment is $30, autonomous real government spending is $30, and autonomous real net exports is -$20.
Compute Aggregate Expenditures at each level of real GDP. What is the value of equilibrium real GDP?
What is the value of the marginal propensity to consume?
What is the value of the marginal propensity to save?
Compute the value of the Keynesian spending multiplier on goods and services.
Give the amount of the change in the equilibrium level of Real GDP due to a $6 increase in spending on goods and services by households.
Give the amount of the change in the equilibrium level of Real GDP due to a $6 increase in spending on goods and services by the federal government.
Give the amount of the change in the equilibrium level of Real GDP due to a $3 decrease in spending on goods and services by state governments.
Suppose the equilibrium level of Real GDP decreases by $20. What was the amount of the change in autonomous expenditures which caused this to happen?
Compute the value of the Keynesian tax multiplier.
Give the amount of the change in the equilibrium level of Real GDP due to a $6 increase in lump-sum taxes.
Give the amount of the change in the equilibrium level of Real GDP due to a $3 decrease in lump-sum taxes.
Suppose spending on goods and services is increased by $6 and lump-sum taxes are increased by $6. Give the amount of the change in the equilibrium level of Real GDP.
Suppose spending on goods and services is decreased by $3 and lump-sum taxes are decreased by $3. Give the amount of the change in the equilibrium level of Real GDP.
Compute the value of the Keynesian spending multiplier for transfer payments.
Give the amount of the change in the equilibrium level of Real GDP due to a $6 increase in unemployment compensation.
Give the amount of the change in the equilibrium level of Real GDP due to a $3 decrease in Social Security payments.