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- Consider an economy that is characterized by the following equations: C= 400 + 0.5 Yd I = 700 - 4000i + 0.1y G= 200 T= 200 (M/P)d - = 0.75Y - 7500€ (MP)== 600 What is the equilibrium consumption (C)?You are an economic advisor to the government. Discuss your opinion . a) How COVID-19 pandemic will affect the consumption behavior as well as the investment done by the firms and household for the next two years? b) What are the actions or policies that the government can implement to face this situation? please answers with analysis and --graph (if possible)a. Is the equilibrium level of income higher or lower than it was in problem 1(a)? Calculate the new equilibrium level, Y', to verify this. b. Now suppose investment increases to I = 100, just as, in problem 1(d). What is the new equilibrium income? Does this change in investment spending have more or less of an effect on Y than it did in problem 1? Why? Draw a diagram indicating the change in equilibrium income in this case. с. d. 3. Now we look at the role taxes play in determining equilibrium income. Suppose we have an economy of the type in Sections 10-4 and 10-5, described by the following functions: C = 50 +.8YD I = 70 G = 200 TR = 100 1-0-0-20. t = .20 a. Calculate the equilibrium level of income and the multiplier in this model. b. Calculate also the budget surplus, BS. c. Suppose that t increases to .25. What is the new equilibrium income? The new multiplier? d. Calculate the change in the budget surplus. Would you expect the change in the surplus to be more or less if c = .9…
- Consider an economy that is characterized by the following equations: C= 400 + 0.5 Yd I = 700 - 4000i + 0.1Y G= 200 T= 200 (MP)d = 0.75Y - 7500; (M/P)S = 600 What is the equilibrium investment (I)?Q.1.6 Given the import function, Z = 300 + 2/3Y, which of the following statements iscorrect?(2)(a) The marginal propensity to save is 1/3;(b) The induced component is 300;(c) 2/3 is the proportion of any income spent on imports;(d) None of the statements is correct.6. Given the savings function S = (3Y2 +2Y)/ ( Y-1) a) Write the consumption function. b) Find the equilibrium level of income, if the consumption is 100. Please answer both subparts. I will really upvote
- QUESTION 5 The expenditure function is given by e(p,u) = (4p1P2u)/(p, + pɔ The Hisksian demand for good one, h, (p,u> is: Oa. h1(p,u) =| 2p2 Pi + P2)u (P2u Ob. hi(p,u) =| Pi 2p2 h (p,u) =| Pi(P1 + P2) Od. 2p2u hi(p,u)=- h1(p,u) = P1(P1 + P2).Choose the correct answer: . If consumption is $25,000 when income is $26,000, and consumption increases to $25,900 when income increases to $28,000, the marginal propensity to consume is: 0,59. (B) 0.65. (C) 0.55. (D) 0.45. 2) Suppose consumption is $10,000 when income is $9,000 and the marginal propensity to save equals 0.1. When income increases to $9,500, consumption will be: $8,500. (B) $10,450. (C) $10,500. (D) $10,050.C=150 + 0.65 y I= 120 G= 80 1- Equilibrium levelof income 2- Consumption 3- Saving
- Suppose the MPC is 0.6. Beginning from equilibrium, investment demand rises by 30. (a) How much does equilibrium output increase? (b) How much of that increase is extra consumption demand?Consider the following demand components: Consumption described as a following: 100 million USD as an autonomous level of consumption plus 95% of disposable income spends on consumption. I = 30 G=15 T= 20 (a)Assuming goods market equilibrium, show equilibrium level of output in this economy. (b)How much output increase, if G increase from 15 to 20, show your calculations.If the consumption function in the economy is given as C = 200 + 0.3(Yd) what will be the saving when disposable income is equal to $100? Group of answer choices a. $270 b. -$130 c. $230 d. $70