Home / Questions / In our simple model if C 100 08y and I 50 equilibrium output will be 2 If in Exercise 31...
In our simple model, if C = 100 + 0.8y, and I = 50, equilibrium output will be ______. 2. If in Exercise 3.1 I increase to 100, a. The equilibrium income will be ______. b. The multiplier is ______. 3. If the marginal propensity to save is 0.3, the MPC must be ______. 4. If the MPC decreases, the multipliers will ______. 5. Estimating Changes in Aggregate Demand. a. Suppose C = Ca + 0.6y and that a shock decreases Ca by $10 billion. By how much will equilibrium income decrease? b. An economy has an MPC of 0.6. By how much will a $10 billion increase in government purchases increase equilibrium income? By how much will a $10 billion increase in taxes decrease equilibrium income? 6. The Paradox of Thrift. The United States has instituted many policies to attempt to increase savings rates in the United States. One such policy was the creation of individual retirement accounts and other incentives for savings. An implication of the income expenditure model is that an increase in the desire of consumers to save will not necessarily lead to higher savings. In fact, total savings will either remain the same or perhaps fall. This is known as the paradox of thrift. Let s see why this is true with an example. a. Suppose I equals 40 and the savings function is S = 100 + 0.4y. Equilibrium income, y, in the economy is 350. Now suppose consumers wish to increase their savings; the new savings function becomes S = 80 + 0.4y. Calculate the new level of equilibrium output and
Apr 06 2020 Read more Less More
The -Select- value of a bond is its stated face value or maturity value, and its coupon interest rate is the stated annual interest rate on the bond. The maturity date is...
Aug 10 2020Consider steady two-dimensional heat transfer in a long solid body whose cross section is given in Fig. P5–65. The temperatures at the selected nodes and the thermal cond...
Jul 20 2020Two very large parallel plates are maintained at uniform temperatures of T1 = 1000 K and T2 = 800 K and have emissivities of ε1 = ε2 = 0.5, respectively. It is desired to...
Jul 19 2020Based on the following information, calculate the sustainable growth rate for Southern Lights Co.: Profit margin = 8.1% Capital intensity ratio = .45 Debt-equity ratio = ...
May 28 2020Show transcribed image text Calculation of individual costs and WACC Dillon Labs has asked its financial manager to measure the cost of each specific type of capital as w...
May 06 2020An example of the IMA's competence standard is to:A) abstain from engaging in or supporting any activity that might discredit the profession.B) communicate informati...
Dec 07 2019Colors of light most useful in photosynthesis are (A) Green, yellow, and orange (B) Red, violet, and blue (C) Infrared, red, and yellow (D) Red, white, and blue
Mar 13 20181. A 3.5-yd (2.68 nr, heaped) hydraulic shovel with a bottom dump bucket is excavating tough clay. The swing angle is 1200 , and job efficiency is 75%. Estimate the shove...
Jul 22 2020Balance Sheet as of End of Fiscal Year (Figures in Millions of USD) 2013 2014 Assets Cash & Mkt. Securities 40 65 Other Current Assets 50 75 Net Fixed Assets 800 900 Liab...
Aug 20 2020Edward's Manufactured Homes purchased some machinery 2 years ago for $51,000. The assets are classified as 5-year property for MACRS. The company is replacing this machin...
Apr 08 2020
Welcome to MyCourseHelp Services, World's leading Academic solutions provider with Millions of Happy Students.
