Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Business Economics Expert

Given the following information for the Macro Economy answer the following questions. In this economy we have an MPC equal to 0.80, Autonomous Consumption equal to $800 billion and a Planned Investment equal to $200 billion. (a) Fill in the Consumption, Saving, Planed Investment and Aggregate Expenditures columns in the table below (the numbers are all in billions of dollars). Income (Y) Consumption (C) Saving (S) Planned Investment (I) Aggregate Expenditures (AE) $0 $0.00 $0.00 $0.00 $0.00 $1,000 $800 $200 $200 $800 $2,000 $1600 $400 $200 $1400 $3,000 $2400 $600 $200 $2000 $4,000 $3200 $800 $200 $2600 $5,000 $4000 $1000 $200 $3200 $6,000 $4800 $1200 $200 $3800 $7,000 $5600 $1400 $200 $4400 $8,000 $6400 $1600 $200 $5000 $9,000 $7200 $1800 $200 $5600 (b) Determine the equilibrium level of Income (Y). Please state the reason for your answer. The equilibrium level of income is $5000.00 this level gives the most in savings that is more efficient for this situation. (c) Calculate the Spending Multiplier for this economy (show how you got your answer). Spending multiplier = 1/MPS=1/1-MPC (d) State in one sentence what your answer in (c) tells us about any new spending that takes place in the economy. (e) Using the Spending Multiplier, determine the change in Planned Investment needed to get this economy to be in equilibrium at Full Employment if the Full Employment Level of Income is $8,000 billion. Please show your work and state exactly what your answer is.

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M91820055

Have any Question?


Related Questions in Business Economics

Suppose that a b and c are events in a sample space s such

Suppose that A, B and C are events in a sample space S, such that: • A and B are equally likely; • C is four times as likely as B; • B and C are independent; • if either B or C occurs, then A cannot occur; • at least one ...

According to the law of diminishing marginal utility the

According to the Law of Diminishing Marginal Utility, the consumer will receive less satisfaction when they consume additional units of goods and services. Explain 3 ways how the firm can influence the consumer purchasin ...

Eleven people have eleven different favorite numbers from 2

Eleven people have eleven different favorite numbers from 2 to 12. They all agree to participate in a 10,000-roll dice game where they bet $1 on their favorite number for each roll of two standard (fair) dice. A donor ki ...

Find the mean and the standard deviation of a binomial

Find the mean and the standard deviation of a Binomial Distribution with n = 65 and p = 0.32 Mean = 24; Stand. Deviation= 4.1 Mean = 20.8; Stand. Deviation= 3.76 Mean = 28; Stand. Deviation= 3.66 Mean = 21.8; Stand. Devi ...

You have a deck of magic the gathering cards with 60 cards

You have a deck of Magic the Gathering cards with 60 cards total. In the deck you have 20 Mana cards, 18 Spells, 3 Artifacts, 12 Creatures, 6 Enchantments and 1 Planes Walker. What is the probability that you draw 2 arti ...

If we believe the percent to be 75 how many police officers

If we believe the percent to be 75%, how many police officers must we survey to estimate the proportion of officers who graduated from a police academy if we want to ensure we can be 90% we are within 2% of the true prop ...

Suppose we have a hypothetical economy with a marginal

Suppose we have a hypothetical economy with a Marginal Propensity to Consume of seventy-five percent (75%). Further assume business investment spending increases by $2,000. By how much will this change affect Gross Domes ...

Determine the sample size n needed to construct a 99

Determine the sample size n needed to construct a 99?% confidence interval to estimate the population mean when σ=24 and the margin of error equals 9.

Provide examples of an example of an inelastic good and an

Provide examples of an example of an inelastic good and an elastic one for your household?

Why the use of nash equilibrium is a solution concept in

Why the use of Nash equilibrium is a solution concept in games? Please give me an detailed explain.

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As