Assume an economy in which: (i) there are no exports and no imports, (ii) investors always want to spend $200 billion, or I = 200, (iii) government spends $500 billion and tax revenue is $200 billion, (iv) consumption is a linear function of disposable income, C=100+0.8Yd Assume that the government eliminates taxes while keeping government spending the same. (Thus T = 0 and G = 500.) The economy’s consumption function and investment remain unchanged. What is the new equilibrium level of national income?

Q: Suppose that the level of GDP increased by $300 billion in a private closed economy where the…

A: Answer: Given, Change in GDP ∆GDP=$300MPC (marginal propensity to consume)=0.9Change in aggregate…

Q: If the marginal propensity to consume equals 0.80, the tax rate equals 0.20, and the marginal…

A: Marginal propensity to consume is the proportion of change in income spent on consumption.Marginal…

Q: consumption function is given by C = 110 + 0.75(Y - T). Planned investment is 300; government…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: Assume a closed economy where the level of I is 300, G=T=150 and the savings function is S= −30 +…

A: Since you have multiple questions, we will answer the first question and its first three sub-parts…

Q: Suppose that the marginal propensity to consume is 0.75. If the government decreases spending by…

A: The Marginal Propensity to Consume (MPC) is a metric that assesses how sensitive consumption is to…

Q: Assume that Canadian government taxes away $0.15 of each dollar of new income, that 35% of the…

A: The quantity of money received by a person, organization, or corporation over a period of time is…

Q: Consider an economy where the marginal propensity to save is 0.15; the marginal propensity to import…

A: Marginal propensity to save (MPS) is 0.15 Marginal propensity to import (MPM) is 0.05 Marginal…

Q: If MPC=0.75 (and there are no income taxes) and if government purchases fall by 45, then the IS…

A: Given information MPC=0.75 Government falls by 40

Q: Autonomous consumption = R100m Investment spending = R300m Government spending = R200 million…

A: Autonomous Consumption = 100 Investment Spending = 300  Government Spending = 200  Exports = 150…

Q: Suppose a government is established in a country where none previously existed. The government…

A: Note:- Since we can only answer up to three subparts, we'll answer the first three. Please repost…

Q: Suppose MPC equals 0.9, government taxes 30% of all incomes, and the marginal propensity to import…

A: here we calculate the change in G, by using the relevant given information , so the calculation as…

Q: Suppose an economy with the following characteristics. Y = Real GDP or national income T= Taxes =…

A:

Q: Assume that, without taxes, the consumption schedule for an economy is as shown in the first two…

A: Please find the attached calculation below-

Q: What is the value of the MPC? 0.8 b. Assume now that a lump-sum tax is imposed such that the…

A: (1)  Before-tax: Before-tax, GDP and Disposable income (DI) are the same.  As we can see, every 100…

Q: a closed economy, GDP is $1000, government purchases are $200, consumption is $700 and the…

A: In a closed economy, GDP= consumption+investment+government expenditure

Q: Suppose that the following equations describe the 4-sector economy Consumption function C= 60 + 0.8…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Consider a closed economy with fixed prices and wages. Suppose consumption function takes the form C…

A: The equilibrium output and budget deficit are as follows:…

Q: Autonomous Consumption R535m  Marginal propensity to consume is 0.75  Investment Spending R322m…

A: The following problem has been solved as follows:

Q: Mexico's real GDP fell from 4.5 trillion pesos to 3.8 trillion pesos over the first part of 2020.…

A: Given,   Fall in GDP = 4.5 trillion pesos to 3.8 trillion pesos  Fall in consumer spending = 3.1…

Q: Suppose the following data for an economy; a consumption function of C = 800 + 0.8Yd, Investment…

A: Given, Consumption, C = 800 + 0.8 Yd Investment, I =  300 Government expenditure, G= 400 Taxes = T =…

Q: In a closed economy, if Y is 12,000, T is 1,000, G is 3,000, and C is 5,000, then the government has…

A: A closed economy is one that has no trading activity with outside economies. The closed economy is…

Q: Consider an economy in which all taxes are autonomous and the following values of autonomous…

A: Since you have posted multiple subparts, as per the guidelines we can solve only the first 3…

Q: Suppose that out of the original 100 of government spending, 33 will be recycled back into purchases…

A: The aggregate expenditure in an economy is a function of consumption expenditure, investment…

Q: Suppose the following data for an economy; a consumption function of C = 800 + 0.8Yd, Investment…

A: Aggregate expenditure is the sum of consumption spending, investment spending and government…

Q: Assume an economy in which: (i) there are no exports and no imports, (ii) investors always want to…

A: The national income is the total income earned by all the citizens of a country in a particular…

Q: Suppose that the marginal propensity to save is   dS dy = 0.93 −  ln(y + 1) y + 1       (in billions…

A: Answer: Given: Marginal propensity to savedsdy=0.93-lny+1y+1Marginal propensity to…

Q: In a closed economy, GDP is $1000, government purchases are $200, and consumption is $700. If the…

A: In Keynesian macroeconomics when the price level in the economy is assumed to be fixed then planned…

Q: C = 160 + 0.7YD, T= 100, I= 150, G= 150, NX = 100 – 0.1Y. a. What is disposable income (YD)? b. What…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: Assume a model where marginal propensity to save is 0.2, the marginal propensity to import is 0.1…

A: Answer: Given, Marginal propensity to save (mps)=0.2Marginal propensity to import mpm=0.1Marginal…

Q: given that,  consumption is C=100+0.75Yd Taxes is T=50+0.5Y Export is X=200 Import is M=50+0.25Y…

A: consumption is C=100+0.75Yd Taxes is T=50+0.5Y Export is X=200 Import is M=50+0.25Y Government…

Q: Marginal propensity to consume = 0.8; In an economy with tax rate = 0.25 and Marginal propensity to…

A: Given: MPC = 0.8 MPI= 0.10 Tax rate= 0.25 Increase in autonomous spending = 250 units.

Q: consumption function is given by C = 110 + 0.75(Y - T). Planned investment is 300; government…

A: It is the case when Government expenditure is equal to Tax revenue collected.

Q: function is given by: C = 200 + 0.75(Y - T). Planned investment (I) is 100, government purchases (G)…

A: the equation of the planned expenditure is  E = C + I + G where I and G are exogenous

Q: In a closed economy, the consumption function is C = 80 + 0.8YD − 20r, where YD is disposable…

A: IS LM model is an important section in the theory of Macroeconomics. It was created by famous…

Q: At the equilibrium level of GDP in the table below, injections equal to? Leave your answer in RM…

A: GDP is the value of all final goods and services produced in an economy. Real GDP is the value of…

Q: Suppose the consumption function is $800 billion +0.8y and the government wants to stimulate the…

A: As there are multiple parts, only the first three would be solved, to get the answers of the rest of…

Q: The consumption function is given by: C = 200+0.75 (Y-T). The investment  function  is  I =…

A:

Q: Consider a closed economy with a government.  Consumption is given by C = 1,000 + 0.8Yd   Further, t…

A: Aggregate output is the sum of consumption, investment, government spending and net exports in an…

Q: Suppose the consumption function is given by C(Y) = 50+0.5 (Y-T), where Y represents income and T…

A: "In a closed economy, macroeconomic equilibrium is attained at a point where total income (Y)…

Q: Consider an economy in which taxes, planned investment, government spending on goods and services,…

A: Given information Ca=1500-20r MPC=0.6 I=2450-60r G=1980 NX=-200 T=1750

Q: Consider an economy in which taxes, planned investment, government spending on goods and services,…

A: According to bartleby guideline I have answered only first three questions.

Q: Assume that government purchases decrease by $10 billion, with other factors held constant,…

A: The autonomous spending multiplier shows the change in national spending as a result of a change in…

Q: An increase in investment spending because companies become more optimistic about investment…

A: We will answer the first question since the exact one was not specified. Please submit a new…

Q: Suppose an economy with the following characteristics. Y = Real GDP or national income T = Taxes =…

A: In an economy, the spending multiplier is also known as the expenditure multiplier that is…

Q: he MPS is 0.1 and the income tax rate is 0.33 the multiplier is approximately

A: Given, Marginal Propensity to Save [MPS] = 0.1 Income tax rate = 0.33 The Marginal Propensity to…