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The accompanying table shows gross domestic product

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The accompanying table shows gross domestic product (GDP), disposable income (YD), consumer spending (C), and planned investment spending(IPlanned) in an economy. Assume there is no government or foreign sector in this economy. Complete the table by calculating planned aggregate spending (AEPlanned) and unplanned inventory investment (IUnplanned).;GDP YD C IPlanned AEPlanned IUnplanned;(billions of dollars);$0 $0 $100 $300;400 400 400 300;800 800 700 300;1,200 1,200 1,000 300;1,600 1,600 1,300 300;2,000 2,000 1,600 300;2,400 2,400 1,900 300;2,800 2,800 2,200 300;3,200 3,200 2,500 300;a) Answer Above;b) What is the aggregate consumption function?;There;c) What is Y*, income-expenditure equilibrium GDP?;There;d) What is the value of the multiplier?;There;e) If planned investment spending falls to $200 billion, what will be the new Y*?;There;f) If autonomous consumer spending rises to $200 billion, what will be the new Y*?;There

 

Paper#24672 | Written in 18-Jul-2015

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