How large is the expenditure multiplier

Assignment Help Macroeconomics
Reference no: EM132631794

Suppose that consumers have an average MPC of 0.75. However, 20% of their income goes to the government in the form of taxes. Furthermore, 25% of disposable income is spent on foreign goods and services rather than domestic goods.

Suppose that the government consumes $750 billion, investment is $500 billion, and exports are $250 billion. Autonomous consumption is also $500 billion.

How large is the expenditure multiplier?

Reference no: EM132631794

Questions Cloud

Discuss scm influence on each of the four areas of strategy : Discuss SCM's influence on each of the four areas of strategy to address mitigation strategies that Nicole could potentially implement.
Explain frictional unemployment-cyclical unemployment : Explain the terms Frictional Unemployment, Cyclical Unemployment, Structural Unemployment. Provide an example of each.
How would the thesis connect to your audience : Write a thesis for your speech. How would this thesis connect to your audience? List three key points for your speech. Why would your audience find these key.
Impact of taxes on the producer and consumer : What are the impact of these taxes on both the producer and consumer? How do these taxes affect you?
How large is the expenditure multiplier : Suppose that consumers have an average MPC of 0.75. However, 20% of their income goes to the government in the form of taxes.
Data executive speaking to data analyst : You will be acting as the data executive speaking to a data analyst. what more data do you think you need to create a decision analysis?
Discuss difficulties that could potentially arise questions : Discuss difficulties that could potentially arise or specific questions related to completing this type of assessment. Include illustrative examples.
Discuss the key value-added activities recognized associated : Discuss the key value-added activities recognized associated with basic process map, using analysis results to identify gaps or opportunities for consolidating
Supply-side disruptions due to covid-19 pandemic : Assume that following supply-side disruptions due to COVID-19 pandemic, construction materials (for example, steel and timber)

Reviews

Write a Review

Macroeconomics Questions & Answers

  Implications of government fiscal and discretionary policies

Develop the ability to understand how economy-wide or regional economic forces affect decisions of senior business managementofficials in the private sector.

  Describe the economic causes also consequences environment

Describe the economic causes also consequences of environmental devastation and its impact on achieving sustainable growth and development.

  What is the rate of return on this investment per six months

John Q is planning to buy a bond having a face value of $100,000 for $90,000. The bond is paying 8% per year payable semi-annually and is redeemable 6 years from now at its face value. What is the rate of return on this investment per six months a..

  Problem regarding the effective price ceiling

How does an effective price ceiling affect buyers and sellers? Explain. What motivates government to entact a price ceilling? Explain using an example.

  Find the first order condition for his or her choice of d

How does a change in D affect G2? Think of the period-1 policymaker as choosing G1 and D. Find the first order condition for his or her choice of D.

  Calculate the price of asset today

A risky asset is expected to deliver $600 at the end of the first year, $50 at the end of the second year, and no further cash flows after that.

  Find the quantity that is the most efficient operating point

What is the purpose of the two fields of study, neuroeconomics and behavioral economics? Why might people tend to be overconfident? Use the following information to determine the total fixed costs, total variable costs, average fixed costs, averag..

  How the countrys financial system is related to key variable

How your organization can reduce the risk they would face in relocating. How the country's financial system is related to key macroeconomic variables

  Suppose an economy is characterized by the standard cobb

suppose an economy is characterized by the standard cobb douglas production function in per capita terms yak ?? h 1-??.

  Reasons why gdp not consider indicator of societys wellbeing

List several reasons why GDP should not be considered an indicator of society's wellbeing

  List the determinants of supply and demand

List the determinants of supply and demand. Read the problem and ask yourself if each determinant has changed. Draw the formula (boxes) and fill in the blanks.

  Understanding the dynamics of house prices

Understanding the dynamics of house prices and household debt in Australia, how it compares to other countries now and in the past

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