Q: A larger marginal propensity to import will make the slope of the aggregate expenditure function…
A: Marginal propensity to import (MPI) can be defined as the percentage change in imports to the…
Q: aggregate expenditure line is AE 1. A $10 million increase in planned investment causes aggregate…
A: Option (c).
Q: An increase in the marginal propensity to save will cause all of the following except a decrease in…
A: We know the relationship between Marginal propensity to consume and save . Their summation is equal…
Q: If investment increases by $10 billion and the economy's MPC is 0.8, the aggregate demand curve will…
A: If the investment is increased by $10 billion and economy’s marginal propensity to consume (MPC) IS…
Q: Assume a closed economy with no government. Suppose that autonomous consumption equals $400, planned…
A: Autonomous consumption = $400 Initial Planned investment = $500 mpc = 0.9 Final Planned investment =…
Q: If an economy is to the left of the equilibrium level of GDP on the Keynesian cross diagram, then…
A: In the Keynesian model, the aggregate expenditures in the economy can be determined using the…
Q: Why can’t an economy with an MPC greater than 1 reach a stable equilibrium in the aggregate…
A: The marginal propensity to consume refers to the increase in consumption expenditure with an…
Q: If aggregate demand is increased by 4500 and MPC is 0.75, what is the increase in Y?
A: Aggregate demand (AD): - It is the total demand for goods and services in an economy at a particular…
Q: If output is above the level of spending balance, then A income will increase. В the marginal…
A: Equilibrium within the Keynesian Cross Diagram. If output was above the equilibrium level, at H,…
Q: Which of the following would likely cause an upward parallel shift in the AE curve and a rightward…
A: MPC is the slope of the Aggregate Expenditure curve (AE). So, an increase in the MPC will not make…
Q: A reduction in U.S net exports would shift U.S. aggregate demand A. rightward. In an attempt to…
A: The correct answer is option c
Q: If the MPC is 0.80, then an initial decrease of taxes of $100 billion will eventually shift the…
A: In economics, the marginal propensity to consume (MPC) is defined as the proportion of an aggregate…
Q: If the MPC in an economy is 0.80, government could shift the aggregate demand curve leftward by $48…
A: The fiscal and monetary policies are used by the governments to control the macroeconomic variables…
Q: For a given price level, a downward shift of the expenditures schedule corresponds to an a. outward…
A: Answer: Correct option: (d) For a given price level, a downward shift of the expenditure schedule…
Q: If investment increases by $15 billion and the economy's MPC is 0.8, the aggregate demand curve will…
A: rightward by $75 billion at each price level. Explanation: As we know Investment multiplier is…
Q: If the MPC in an economy is 0.9, a $4 billion increase in government spending will ultimately…
A: MPC or Marginal Propensity to Consume measures the increase in spending with the increase in…
Q: An increase in net exports will shift the AD curve to the Multiple Choice right by a multiple of the…
A: A change in a component of AD shifts the AD by multiple of the change in component. AD components…
Q: A rise in interest rate.
A:
Q: a reccessionary gap exists when aggregates demand is above the full employment level of output
A: A recessionary gap refers to the distinction between actual associate degreed potential production…
Q: If the MPC In an economy Is 0.80, government could shift the aggregate demand curve leftward by $12…
A: Tax multiplier and aggregate demand curve move in the same direction. It means as aggregate demand…
Q: in the AD/AS model with an upward sloping SRAS curve, if autonomous net exports decreases by 575…
A: at Equilibrium Aggregate demand and aggregate supply are same. and their interaction determines the…
Q: he aggregate demand curve is directly derived from the expenditures schedule. True or False
A: An AD curve (aggregate demand ) states the whole spending on commodities and services at per level…
Q: If the consumption function is C = 100 + 0.75YD,I = 200, government spending is 200, and net…
A: Aggregate Expenditure = Consumption + Invesment + Government spending + Net export
Q: Analyze the impact of the expenditure multiplier from Keynesian Perspective
A: The expenditure multiplier from the Keynesian Perspective is an expression for measuring an increase…
Q: Calculate Investment multiplier when MPS is 0.22
A: # We know that the reciprocal of MPS gives the investment multiplier. Investment multiplier = 1/MPS…
Q: Autonomous Consumption R535m Marginal propensity to consume is 0.75 Investment Spending R322m…
A: C=C0+cYd C=Consumption C0=Autonomous Consumption C=Marginal propensity to consume Yd=Disposable…
Q: In 250 words or less, answer the following question. With reference to the multiplier process,…
A: The makers of those labor and products see an increment in pay by that sum. They utilize that pay to…
Q: The introduction of taxes and imports into the Aggregate Expenditure model leads the AE line to…
A: Aggregate Expenditure is the value of goods and services in the economy. AE=C+I+G+NX which gives…
Q: Autonomous Consumption R535m Marginal propensity to consume is 0.75 Investment Spending R322m…
A: Formula to get equilibrium output is Y = C + I + G + X + M Where, C = Consumption I = Investment G =…
Q: Q.1.13 An increase in the marginal propensity to consume: (1) Shift the aggregate spending function…
A: Since you have posted multiple questions as per the guidelines we can solve only one at a time.
Q: The total expenditure schedule in Macroland begins with these initial levels (in billions of…
A:
Q: Assume the MPC is 0.8. Assuming only the multiplier effect matters, a decrease in government…
A:
Q: Why can’t an economy with a MPC greater than one reach a stable equilibrium in the aggregate…
A:
Q: If Mexican exports to Canada decline by $14 billion, by how much will Mexico's aggregate spending…
A: Aggregate Spending = Aggregate Expenditure = Consumption Exp (C) + Investment Exp (I) + Govt Exp (G)…
Q: How are the following events likely to influence the level of private domestic investment?…
A: Private domestic investment refers to the total expenditure made by the people of a country in…
Q: Nigeria is currently experiencing a recessionary gap of approximately 24.6 billion in their…
A: Tax multiplier = MPC / 1-MPC Recessionary gap = Real GDP is less than potential GDP.
Q: If investment increases by 24 billion and the economy's MPC is 0 0.5, the aggregate demand curve…
A: Aggregate demand is the sum of the monetary value of all the goods and services produced in the…
Q: If the MPC in an economy is 0.75, government could shift the aggregate demand curve leftward by $30…
A: MPC= Percentage of new income that is spent on consumption rather than saving
Q: What would an increase in planned investment increases real GDP, but an unplanned increase in…
A: The aggregate expenditure model determines the equilibrium level of real GDP using components of…
Q: Suppose that exports increase by $300 billion, given an MPC of .75. Calculate the change in GDP.…
A: Gross domestic product (GDP) is the standard measure of the value added created through the…
Q: TRUE/FALSE If aggregate expenditures exceed aggregate income then inventories will rise and firms…
A: The statement, given in the question "If aggregate expenditures exceed aggregate income then…
Q: If the aggregate expenditure line shifts in response to a decrease in real wealth, describe the…
A: Planned aggregate expenditure refers to the sum of expenditure on consumption, investment,…
Q: Suppose that technological advancements stimulate $4 billion in additional investment spending. If…
A: Given, At the point when corporate speculation increments, both total inventory bends shift to one…
If net exports increase by 100 and the mpc is 0.75, equilibrium
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- At a aggregate output level of $200 billion what is planned aggregate expenditure?The marginal propensity to save of a certain country is given by S'(x) = 0.5 + 0.4x. Determine the marginal propensity to consume. Answer C' (x) = ||If aggregate demand is increased by 4500 and MPC is 0.75, what is the increase in Y?
- A larger marginal propensity to import will make the slope of the aggregate expenditure function flatter. True or FlaseIf investment increases by $10 billion and the economy's MPC is 0.8, the aggregate demand curve will shiftSuppose that exports increase by $300 billion, given an MPC of.75. Calculate the change in GDP. Give your answer in billions and leave off the dollar sign. Be sure to include a negative sign if appropriate.
- The fluctuations in the income level that result from changes in investment spending depend only on the magnitude of the changes in investment spending but not on the size of the MPC tend to be larger if the income tax rate (t) is larger tend to be larger with a larger MPC tend to be larger the larger the marginal propensity to import tend to be larger with a larger MPSTRUE/FALSE If aggregate expenditures exceed aggregate income then inventories will rise and firms will eventually lay off workers.In the AD/AS model with an upward sloping SRAS curve, if autonomous net exports decreases by $75 billion and the marginal propensity to consume (MPC) is 0.75, then there is a(n) V [Select] in [Select] by [Select] billion.
- Nigeria is currently experiencing a recessionary gap of approximately 24.6 billion in their currency. Its MPC is approximately 0.8. How much would the government have to change taxes to close the gap? Assume a horizontal SRAS. If the government should decrease taxes, enter a negative answer. one decimal placeAssume taxes are zero and an economy has a consumption function of C = 0.56 (Yd) + $777.68. By how much will GDP change if net exports change by -411.26? Round your answer to two digits after the decimal.If economists forecast a decrease in aggregate expenditure, which of the following is likely to occur?GDP will rise. GDP will fall. Wages will rise. Inventories will fall.