Compute expenditure schedule and determine the equilibrium

Assignment Help Microeconomics

Reference no: EM13395497

In an economy with no government sector, investment is 1,000, net exports are 100 and the consumption function is:

Income Consumption

3,000 2,100

3,500 2,500

4,000 2,900

4,500 3,300

5,000 3,700

5,500 4,100

a) Calculate the expenditure schedule, and find the equilibrium level of GDP.

b) What are savings at this equilibrium GDP?

c) What is the marginal propensity to consume?

d) What is the multiplier?

e) People lower their savings and raise their consumption by 200 at each level of GDP. Use the multiplier to find the new equilibrium GDP.

f) Confirm your answer to e) by calculating the new expenditure schedule.

g) What is the level of savings at the new equilibrium GDP?

h) Compare and explain your answers to b) and g).

Reference no: EM13395497

Questions Cloud

Which of the following statements is true regarding : which of the following statements is true about referring to visuals in the text of a document? a. in general you

Explain any historic or present day social economic or : 1. describe any historic or present day social economic or political issues that either help or hinder us in limiting

The twenty-first century closed-end fund has 350 million : the twenty-first century closed-end fund has 350 million in securities 8 million in liabilities and 20 million shares

Bickley engineering company has a capital structure of 30 : bickley engineering company has a capital structure of 30 debt and 70 equity. its current beta is 1.3 and its market

Compute expenditure schedule and determine the equilibrium : in an economy with no government sector investment is 1000 net exports are 100 and the consumption function isincome

Find out the size of loan and amount that will have to be : question. an investor is considering purchasing an apartment complex for 240000. a loan for 20 years at 75 percent of

Be prepared to describe the significance of mendels : mendel used mathematics and experimentation to derive major principles that have helped us understand inheritance. his

From the given data determine the marginal propensity to : from the following data find the marginal propensity to consume compute the expenditure at each level of gdp and find

Mitosis and meiosis are the two main processes by which : mitosis and meiosis are the two major processes by which eukaryotic cells reproduce. compare and contrast the processes

User Account

All Pages