Find the equilibrium level of income

Assignment Help Microeconomics
Reference no: EM132512119

Assume a Keynesian macro model: AE = C + I + G + NX C = 100 + 0.75Yd I = 300 G = 285 NT = 100 X = 40 M = 50

a) Find the equilibrium level of income.

b) Calculate the tax multiplier and find the effect on equilibrium level of income of a change in the level of net taxes from 100 to 50 by using tax multiplier.

c) If government wants to reach a 100 $ higher aggregate output level with no change in the budget deficit, how much should the government spending and/or net taxes increase or decrease?

d) What will be the effect of an expansionary fiscal policy of a change in the government spending by 25? Find by using multiplier. Find the new equilibrium level of output.

Reference no: EM132512119

Questions Cloud

Kingston-bryce kick-off project plan : You have just been hired as a Project Manager for Kingston-Bryce Limited and have been assigned your first project.
Find the equilibrium level of income : Assume a Keynesian macro model: AE = C + I + G + NX C = 100 + 0.75Yd I = 300 G = 285 NT = 100 X = 40 M = 50
Explain the key issues involved in impairment testing : In your analysis, you can refer to one or more publications issued by the 'Big 4' firms, accounting professional bodies or academic journals
Develop a frequency distribution : Develop a frequency distribution, a percent frequency distribution, and a histogram. Use a class width of 2.5 million - What observations can you make
Find the equilibrium level of income : Assume a Keynesian macro model: AE = C + I + G + NX C = 100 + 0.75Yd I = 300 G = 285 NT = 100 X = 40 M = 50
Business intelligence and information systems : Critically think about some of the learning objectives and concepts presented in the " Business Intelligence and Information Systems"
Callable bond or non-callable which one is good for investor : Book Value and EPS, really facilitates the Investors in Financial Decision Making.why? Debt Financing is good for the company instead of Equity Financing why?
Adverse demand shock : How will the central bank respond to an adverse demand shock?
Implications of fiscal policy in these two extreme cases : What are the implications of fiscal policy in these two extreme cases?

Reviews

Write a Review

Microeconomics Questions & Answers

  Plot the relationship between leisure and gpa

Plot the relationship between leisure and GPA on a graph. (Hint: Assume that the general shape is that of an inverted parabola.) Michelle has standard.

  What will happen to capital productivity in omega

Suppose 20 foreign workers with exactly the same skills and same education level asdomestic workers immigrate to country Omega and try to find a job. Holding everything else constant, what will happen to capital productivity in Omega

  Analyze the economics of new orleans

Analyze the economics of New Orleans in light of the above parameters and develop your own Cost-Benefit Analysis (CBA) for rebuilding.

  Find the equilibrium prices and quantities of given question

Write the system in matrix form and find the equilibrium prices and quantities.

  Explain how a positional arms race can occur

Using a prisoner's dilemma game such as the "wedding game." explain how a positional arms race can occur. In your answer be sure to explain positional arms races, the nature of the wedding game, etc.

  Plot the data in your table as a budget line in a graph

Suppose you won $15 on a lotto ticket at the local 7-Eleven and decided to spend all the winnings on candy bars and bags of peanuts. The price of candy bars is $.75 and the price of peanuts is $1.50.

  Find real wage-employment-output and unemployment

Consider an economy where, consumer’s utility function is given as U(C,L)=C-(1/2)L2 . Where C is consumption and L is labor. The production technology is Y=(1.6)L-(1/2)L2. The turnover cost per labor is (0.36)/(w/p)

  Firm and state what is the market structure

Select an industry or firm and state what is the market structure (pure competition, or monopoly, or monopolistic, or oligopoly).Define the characteristics of the industry or firm to support your selection of a market structure. Explain or illustrate..

  Relation btwn marginal product of labor and marginal cost

When the firm increases labor input, which of the following is correct about the relationship between marginal product of labor and marginal cost? Answer If marginal product is increasing, marginal cost will be decreasing. Marginal cost is equal t..

  Explain how would you be able to measure that variable

Explain how would you be able to measure that variable? What do you think is a better variable to measure worker productivity during work?

  Describe the meaning of average cost

Describe the meaning of average cost. You normally buy a crate of wine for $75. One crate has 6 bottles of wine. After a month, the store clerk informs you that the same crate of wine now costs $82.

  How many miles must each salesperson drive each year

A firm must decide whether to provide their salespeople with firm-owned cars or to pay a mileage allowance for their own cars. New cars would cost about $28,000

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd