... HAYATEVESIGAR 2:25 PM @ 79% 4. (15 points) Refer to the information provided in Table below to answer the questions that follow. Disposable Income Consumption Spending (C=100+0.9Yd) Planned Aggregate Expenditure Unplanned Inventory Change Output Net (Income) | Taxes 2400 100 2800 100 3000 100 3200 100 3400 100 3600 100 3800 100 Savings 150 170 190 210 230 250 270 Planned Investment Government Spending Spending 130 200 130 200 130 200 130 200 130 200 130 200 130 200 a) (4 pts) Fill in the columns in the table. b) (2 pts) Identify the equilibrium output. Please solve the following questions (c, d, e) by using related multiplier. c) (3 pts) The economy is at the equilibrium level of output. If government spending increases to a level of $400 billion, what will be the new equilibrium level of output? d) (3 pts) The economy is at the equilibrium level of output. If taxes are reduced from $100 billion to $50 billion, what will be the new equilibrium level of output? e) (3 pts) The economy is at the equilibrium level of output. Government spending is increased from $200 billion to $250 billion and this increase is financed by increasing taxes from $ 100 billion to $150 billion and, what will be the new equilibrium level of income? 5. (10 points) The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank No. 1. Assume all banks are loaned up. Loans Bank No. 1 Bank No. 2 Bank No.3 Bank No. 4 New Deposit $100,000 $90,000 $81,000 $72.900 Required Reserve $10,000 $9,000 $8,100 $7.290 $90,000 $81,000 $72,900 $65,610 a) (2 pts) According to the figures, what is the required reserve ratio? b) (4 pts) What is the money multiplier in this economy? c) (4 pts) How much money will be created based on the initial $100,000 deposit? ... HAYATEVESIGAR 2:25 PM @ 79% 4. (15 points) Refer to the information provided in Table below to answer the questions that follow. Disposable Income Consumption Spending (C=100+0.9Yd) Planned Aggregate Expenditure Unplanned Inventory Change Output Net (Income) | Taxes 2400 100 2800 100 3000 100 3200 100 3400 100 3600 100 3800 100 Savings 150 170 190 210 230 250 270 Planned Investment Government Spending Spending 130 200 130 200 130 200 130 200 130 200 130 200 130 200 a) (4 pts) Fill in the columns in the table. b) (2 pts) Identify the equilibrium output. Please solve the following questions (c, d, e) by using related multiplier. c) (3 pts) The economy is at the equilibrium level of output. If government spending increases to a level of $400 billion, what will be the new equilibrium level of output? d) (3 pts) The economy is at the equilibrium level of output. If taxes are reduced from $100 billion to $50 billion, what will be the new equilibrium level of output? e) (3 pts) The economy is at the equilibrium level of output. Government spending is increased from $200 billion to $250 billion and this increase is financed by increasing taxes from $ 100 billion to $150 billion and, what will be the new equilibrium level of income? 5. (10 points) The following table shows the changes in deposits, reserves, and loans of 4 banks as a result of a $100,000 initial deposit in Bank No. 1. Assume all banks are loaned up. Loans Bank No. 1 Bank No. 2 Bank No.3 Bank No. 4 New Deposit $100,000 $90,000 $81,000 $72.900 Required Reserve $10,000 $9,000 $8,100 $7.290 $90,000 $81,000 $72,900 $65,610 a) (2 pts) According to the figures, what is the required reserve ratio? b) (4 pts) What is the money multiplier in this economy? c) (4 pts) How much money will be created based on the initial $100,000 deposit
