Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Business Economics Expert

Multiplier effect on equilibrium output in aggregate expenditure model

Use the following information on the variables in the open economy aggregate expenditure model:

Autonomous Consumption C0= 200
Autonomous Investment I0= 200
Government Spending G0=100
Export Spending X0 =100
Autonomous Import spending M0= 100
Taxes T0=0
Marginal propensity to consume c1= 0.8
Marginal propensity to invest i1= 0.1
Marginal propensity to import m1= 0.15

A- Compute the equilibrium level of income

B- If Government spending increases from 100 to 300, Compute the new equilibrium

C- Compute the value of the multiplier.

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M916650

Have any Question?


Related Questions in Business Economics

If a firms total cost function is given byt c

If a firm's total cost function is given byT C= 115,000Q-500Q2+Q3, what range of output does the firm have economies of scale?

Determine the minimum sample size required when you want to

Determine the minimum sample size required when you want to be 95% confident that the sample mean is within one unit of the population mean. Assume a standard deviation of 4.3 in a normally distributed population.

What effect does the teacher have on creating a learning

What effect does the teacher have on creating a learning environment with little to no behavior problems?

Cathy buys a house her principal residence for 2500000

Cathy buys a house (her principal residence) for $2,500,000, paying $500,000 down and borrowing the other $2,000,000 at 5% interest. If her interest expense for the year is $100,000, how much will her maximum deduction f ...

A marketing company conducted a study where women and men

A marketing company conducted a study where women and men were asked to express a preference for one of two commercials-A or B-for the new iPhone XS. For the women, 44 out of 100 preferred commercial A. For the men, 79 o ...

The managers of a car store observe that 70 of all the cars

The managers of a car store observe that 70% of all the cars they sell are bought by people who already own a car. They also observe that 50% of the customers who come to the store but do not buy a car, already own one. ...

You are the manager of a firm that produces and markets a

You are the manager of a firm that produces and markets a generic type of soft drink in a competitive market. In addition to the large number of generic products in your market, you also compete against major brands such ...

Espn pays the nfl 11 billion per year for 8 yrs for the

ESPN pays the NFL $1.1 Billion per year for 8 yrs for the right to exclusively televise football. What is the NPV of the investment if the parent Disney CO has an opportunity interest rate that is equal to the cost of ca ...

What is the effect of changes in gasoline prices on the

What is the effect of changes in gasoline prices on the demand for restaurant meals? Is gasoline an economic complement of restaurant meal Are restaurant meals an economic complement of gasoline

At a college the scores on the chemistry final exam are

At a college the scores on the chemistry final exam are approximately normally distributed, with a mean of 75 and a standard deviation of 15. The scores on the calculus final are also approximately normally distributed, ...

  • 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