What is the value of the multiplier for this economy

Assignment Help Microeconomics
Reference no: EM13685500

Presume we are given the following information for the economy of Birch enough. GDP is $12,000, planned investment spending is $400 and autonomous consumption is $600. The marginal propensity to consume is 0.82.

1) Derive the consumption function.

2) How much is consumption in this economy.

3) How much is unplanned inventory investment?

4) What is the value of the multiplier for this economy?

5) Compute planned aggregate spending. e) Solve for the equilibrium level of real GDP.

6) Given this income-expenditure equilibrium, what will firms most likely do?

7) Given the consumption function you found in part a, what is the equation for the corresponding savings function?

Reference no: EM13685500

Previous Q& A

  A risk adverse individual

A risk adverse individual has to choose among $100 with certainty and a risky option with two equally likely outcomes, $100-x and $100+x. Use graph or math to show that this person's risk smaller, the smaller x is (the less variable the gamble is

  Increase mongolias rate of economic growth

How might freeing up dead capital have helped to increase Mongolia’s rate of economic growth? What kind of investment would foreign residents undertake if they were to purchase a small fraction of the shares of stocks owned by Mongolia’s residents?

  Standard errors still are utilized for hypothesis testing

Presume that the dependent variable in your regression has a non-normal distribution, even after controlling for the x variables (In other words, MLR.6 is violated). Under what circumstances can the OLS coefficients and standard errors still are util..

  Recent changes in airline baggage handling limit travellers

Recent changes in airline baggage handling limit travellers to one 40-50 lb checked bag without penalty. Is this good FAA-imposed public policy? Good for whom? Bad for whom? Why should the FAA impose the rules instead of individual airlines offering ..

  Amount of fertilizer farmer jones puts on the corn fields

Why may the amount of fertilizer Farmer Jones puts on the corn fields not affect the corn price or Jones' neighbour’s profits? But if Cadillac offers a new fuel "economic V-8" how come Lexus, BMW, Mercedes, Infinity, and Acura are affected?

  What uniform series of cash flows is equivalent

What uniform series of cash flows is equivalent to a $100,000 cash flow, fifteen years from now, if the uniform cash flows occur at the end of the year for the next fifteen years and the periodic interest rate is 8.5 percent compounded yearly?

  Monetary policy is impotent in achieving macroeconomic goals

Describe why a monetary policy is impotent in achieving macroeconomic goals under the fixed exchange rate system. Begin your discussion with the assumption that the economy is at equilibrium in the balance of payments (external balance), however at l..

  Average growth rate of aggregate output for the economy

If from 1980 to 2005, the average growth rate of aggregate output for the economy of Groland was 4.5 percent, while over the same time, Groland's population grew an average of 2.0 percent per year, and then aggregate output per person grew at an aver..

  A laser-based system installed

A laser-based system installed for B = $150,000 three years ago can be sold for SP = $180,000 now. Based on 5-year MACRS recovery, BV3 = $43,200. GI for year is $800,000 and annual operating expenses average $50,000. Decide TI and taxes if Te = 34 pe..

  Department of cass county has estimated that initial cost

The park and recreation department of Cass County has estimated that the initial cost of a park will be $2.3 million. Annual upkeep costs are estimated at $ 120,000. Benefits of $340,000 per year and dis-benefits of $ 40,000 per year have also been i..

Reviews

Write a Review

 

Similar Q& A

  Show and explain youngs theorem

The great philosopher Rogers once said that you need holding knowledge (H), folding knowledge (F), and economics knowledge

  There is significant disagreement whether a dependable

there is significant disagreement whether a dependable positive correlation relationship exists between incentive pay

  In neoclassical growth models sources of growth is

in neoclassical growth models the sources of growth is exogenous usually technology. such theoretical models hence are

  Differences between price ceiling

Differences between price ceiling and price floor with the aid of diagram

  In 2012 a baseball player signed a contract reported to be

in 2012 a baseball player signed a contract reported to be worth 89.8 million. the contract was to be paid as 13.2

  For the project you are required to read and examine 5

for this project you are required to read and analyze 5 recent articles from the wall street journal each covering a

  The benefits and costs of an investment project the

the benefits and costs of an investment project the purchase of a piece of machinery are those given in the following

  Assume that supply of gasoline suddenly increases while

given the following information about the market for gasoline quantities in millionsprice per gallonquantity

  Explain arrow''s impossibility theorem

On their way to their chosen resturant, they see that the Mexican and French resturants are closed, so they use a Borda count again to decide between the remaining two restaurants. Where do they decide to go now?

  Compute als current yield capital-gains yield and total

consider a coupon bond that pays 350 every year and repays its principal amount of 5000 at the end of four years. if

  What determines whether there are any limitations on the

If Apple iPod only played iTunes, and iTunes only could be heard on the Apple iPod, could Apple price the technologically integrated bundle any way they wanted?

  Assume initial conditions of economy are characterized by

suppose the initial conditions of the economy are characterized by the following equations. in this problem we assume

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