2:24 C 50 2013-Revised-M4A1 2 Q . . . Homework 4: Chapter 31 Name: Class: Date: This assignment relates to following learning outcomes: collect information from various sources relating to economic issues/problems . recognize and analyze the features of the aggregate expenditures (AE) model explain how economists combine consumption and investment to depict an aggregate expenditures schedule for a private closed economy and how that schedule can be used to demonstrate the economy's equilibrium level of output (where the total quantity of goods produced equals the total quantity of goods purchased) Follow the instructions below to complete the assignment. Instructions Read Chapter 31: The Aggregate Expenditure Model and review the website: The National Bureau of Economic Research (NBER)/ Bureau of Economic Analyses (BEA). 1.1. What is the US GDP for the first quarter and second quarter of 2021? What is the personal consumption expenditures for the first quarter and second quarter of 2021? Go to the website for the Bureau of Economic Analyses (BEA): https://www.bea.gov/ Section 1: Domestic Product and Income; Table 1.1.5 https://apps.bea.gov/iTable/?reqid=19&step=2&isuri=1&categories=survey#eyJh cHBpZCI6MTksInNOZXBzijpbMSwyLDNdLCJKYXRhljpbWyJjYXRIZ29yaWzliwi U3VydmV5110sWyJOSVBBX1RhYmxIXOxpc3QiLC|1/11dfQ== 1.2. In the table below is data for a hypothetical private-closed economy. Table 1 A Private Closed Economy Real domestic Consumption Saving Investment Aggregate output (GDP=DI) (billions) (billions) (billions) Expenditures (billions (billions $240 $244 $ -4 $16 $260 260 260 16 276 280 276 16 292 300 292 16 308 Mobile View Read Aloud Headings1.2. In the table below is data for a hypothetical private-closed economy. Table 1 A Private Closed Economy Real domestic Consumption Saving Investment Aggregate output (GDP=DI) (billions) (billions) (billions) Expenditures billions) (billions) $240 $244 $-4 $16 $260 260 260 0 16 276 280 276 4 16 292 300 292 8 16 308 320 308 12 16 324 340 324 16 16 340 360 340 20 16 356 380 356 24 16 372 400 372 28 16 388 Recall, private means that there is no government and closed means that there is no foreign trade. Use the information in the Table 1 to analyze aggregate expenditures (AE) model below (Figure 1. Equilibrium in a Private Closed Economy). Figure 1. Equilibrium in a Private Closed Economy 45 degree Aggregate Expenditures AE Real Domestic Output 240 260 280 300 320 340 369 350 400 e 1.3. Identify the mistake and explain why the graph of the aggregate expenditures line does not correctly illustrate the economy's equilibrium. 1.4. Create a graph for the aggregate expenditures (AE) model in Excel using the data from Table 1: A Private Closed Economy. Watch the tutorial: How to Create a Basic Chart in Excel. Remember, the 45degree line (also known as the Keynesian Cross) is a tool that shows how differences in aggregate expenditures and real GDP can affect business inventories which will affect future levels of real GDP. Aggregate expenditure and GDP are both function of consumption, investment, government spending, and net exports. So, the equations for the two are identical: Y =C +1+ G + NX, and AE (aggregate expenditure) = C + 1+ G + NX For private closed economy the equation is: Y =C + L, and AE (aggregate expenditure) = C + |