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.