Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3. For the table shown, answer the following questions: Actual Net Unplanned aggregate Planned exports investment expenditure or Consumption investment Government (NX) (Inventory Future output

image text in transcribedimage text in transcribedimage text in transcribed
3. For the table shown, answer the following questions: Actual Net Unplanned aggregate Planned exports investment expenditure or Consumption investment Government (NX) (Inventory Future output (Y) (9) (billions of spending (G) (billions change) output (billions of $) (billions of $) $) (billions of $) of $) (billions of $) tendency 350 200 60 90 60 400 220 450 240 500 260 550 280 a. What is the marginal propensity to consume for households in this economy? b. Based on the assumptions of our aggregate expenditure model, fill in the columns for planned investment, government spending, and net exports. What is this type of expenditure called? C. For each level of actual aggregate expenditure, calculate unplanned inventory investment. d. What is the equilibrium level of aggregate expenditure in this economy? How do you know? C. For each level of actual aggregate expenditure, label the future output tendency as "increase," "decrease," or "same" based on what you expect to happen to future output. What relationship does this categorization have to your answer in part d?1. For the table shown, answer the following questions: Net Unplanned Actual aggregate Planned exports Investment expenditure or Consumption investment Government (NX) (inventory output (Y) (C) (billions of (billions (billions of $) spending (G) change) (billions of $) $) (billions of $) of $) (billions of $) 500 300 150 100 50 600 350 700 400 8OO 450 900 500 a. For each level of actual aggregate expenditure, calculate unplanned inventory investment. b. What is the equilibrium level of aggregate expenditure in this economy? How do you know? c. Suppose that planned investment increases by $50 billion. What is the new equilibrium level of aggregate expenditure in this economy? d. What is the marginal propensity to consume in this economy? e. What is the expenditure multiplier in this economy?egate expenditure [PAE, billions of $) PAE -Y 500 460 PAE, 440 400 400 500 Actual aggregate expenditure (output or GDP, Y, billions of $) a. What is the expenditure multiplier in this economy? b. What is the marginal propensity to consume in this economy

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Macroeconomics Principles and Applications

Authors: Robert e. hall, marc Lieberman

5th edition

1111397465, 9781439038970, 1439038988, 978-1111397463, 143903897X, 9781439038987, 978-1133265238

More Books

Students also viewed these Economics questions

Question

What is order of reaction? Explain with example?

Answered: 1 week ago

Question

Derive expressions for the rates of forward and reverse reactions?

Answered: 1 week ago