Reference no: EM13202270
On the planet Omicron Persei 8, government spending is $1000, net taxes are $1200, and planned investment is $1400. Consumers spend according to the equation C = 100 + 0.8Yd, where Yd represents disposable income. Given this information, fill out the table below to determine which of the output levels represents a macroeconomic equilibrium, then answer the questions that follow.
Output (Income) Y Net Taxes T Disposable Income Yd Consumption C Planned Investment I Government Purchases G Planned Aggregate Expenditure AE Unplanned Inventory Change 6200 1200 5000 3850 1400 1000 6250 -50 6700 1200 5500 4225 1400 1000 6625 75 7200 1200 6000 4600 1400 1000 7000 200 7700 1200 6500 4975 1400 1000 7375 325 8200 1200 7000 5350 1400 1000 7750 450
a. Which level of output is a macroeconomic equilibrium? There is no level of equilibrium based on the inventory levels.
b. Is the government budget balanced, in deficit, or in surplus, and by how much? Since the government is spending less than it is collecting in taxes, we are showing a surplus.
c. Find the marginal propensity to consume, and the marginal propensity to save.
d. Find the government spending multiplier. If the government wanted to increase the equilibrium level of income by $1,000, by how much would it have to increase government purchases?
e. Find the tax multiplier. If net taxes were lowered by $100, what affect would it have on the equilibrium level of income?
|
Value for the hospitals investors
: If interest rates rise over the next year, which bond will lose the most value and explain why the higher rated bond, Salt Lake City Revenue Bond, has a negative yield to maturity (YTM) - Discuss whether this project would add value for the hospital'..
|
|
Determine what is jerrys marginal cost
: Given a numeric production schedule, you will calculate profit and make decisions about short-run profitability to answer questions relating to your calculations. Jerry's Lock Shop is a perfectly competitive firm, and Jerry is operating at his lev..
|
|
Why might a business owner keep the business open
: A pure monopolist determines that at the current level of output the marginal cost of production is $2, average variable costs are $2.75, and average total costs are $2.95. The marginal revenue is $2.75. What would you recommend that the monopolis..
|
|
Why might a parent company choose to franchise local outlets
: Why might a parent company like McDonalds or Hilton choose to franchise its local outlets rather than own them and staff them with employees In many smaller cities all McDonald's outlets are owned by the same franchisee.
|
|
Find the government spending multiplier
: On the planet Omicron Persei 8, government spending is $1000, net taxes are $1200, and planned investment is $1400. Consumers spend according to the equation C = 100 + 0.8Yd, where Yd represents disposable income.
|
|
Is there sufficient evidence to refute this claim
: The sample results were x= 357.5, s= 117.29. Logger working on the road claims the skidding distance is at least 400 meters. Is there sufficient evidence to refute this claim?
|
|
By how many yards
: The girls then repeated the race, with yolanda starting 10 yards behind the starting line. If each girl ran at same rate as before, who won the race? By how many yards?
|
|
What is the main drawback and benefit of the proposal
: Explain what, in turn, will happen to income. A government official suggests increasing government purchases by $100. What is the main benefit of this proposal What is the main drawback of this proposal
|
|
Write an expression for the total number of miles
: Last week, Tom drove 284 miles. This week, he drove miles. Using , write an expression for the total number of miles he drove in the two weeks.
|