Question: a) Consumption (C ) = Autonomous Consumption (Ca) + MPC (c){Income(Y) Autonomous Tax} = $1,400 + 0.6*($10,000 - $1,750) = $6,350 b) Savings (S) =

a) Consumption (C ) = Autonomous Consumption (Ca) + MPC (c){Income(Y) Autonomous Tax} = $1,400 + 0.6*($10,000 - $1,750) = $6,350 b) Savings (S) = Investment (1) = Y (national income) Consumption (C) Government Expenditure (G) = $10,000 - $6,350 - $1,950 = $1,700 c) Planned investment (Ip) = Y C G = S = $1,700. Actual investment = Y C G = $1,700 Unintended inventory investment = Actual Investment (I) planned Investment (Ip) = 1,700 1,800 = -$100 d) Injections: Savings + Tax + Imports Leakages: Investment +Government Expenditure + Exports Total injections = $1,800 + $1,750 + 0 = $3,550 Total leakages = $1,700 + $1,950 + 0 = $3,650 e) The economy is not at equilibrium when Y = $10,000. Equilibrium level = C + I + G = $6,350 + $1,800 + $1,950 = $10,100

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Question 1 Which of the following best represents the savings function? Group of answer choices Savings = Autonomous Consumption + marginal propensity to save x disposable income Savings = Autonomous...

Problem Please solve given paper below with the help of given formulas under that paper.. Balance Sheet Analysis Fiscal Period: December 2014 2015 2016 2017 2018 2019 Net Debt 1,35 2.81 5,58 7,27...

Problem 1: Building the AEF Function [30 Points] Suppose that we are in an economy with international trade, the government, domestic consumption, and investment. The government retains a tax rate...

Assignment 3: A IS-LM model: We consider a economic system, where our GDP, which is given by: Z = C(Y T) + G + I(r), C(Y T) = C0 + C1(Y T), I(r) = I0 I1r, Where Z is planned expenses, our Y is our...

Nortel: The Rise and Fall of a Telecommunications Company1 By Timothy Fogarty, Michel L. Magnan, Garen Markarian Timothy Fogarty is a professor of taxation and business law at the Weatherhead School...

.. a good explanations on each question please 9. The consumption function shows the relationship between consumption and: Interest rates. Saving. Price level changes. Disposable income 10. At the...

Assignment 01 (semester 2) Assignment 01 Unique number 730716 Closing date 30 August 2021 Content Learning units 1 and 2 of the Study Guide and the relevant chapters of the prescribed book Questions...

Hi there, could you kindly assist with my Economics Homework Keynesian and Reserve Requirement Calculations Purpose: Calculate Macroeconomic fiscal policy outcomes using Keynesian math, calculate...

CONCORDIA UNIVERSITY Department of Economics ECON 203 SAMPLE MIDTERM EXAMINATION WITH ANSWERS Multiple Choice Questions (2 marks each). 1.Gross domestic product (GDP) equals the ______ of final...

Econ assignment. 20. The marginal propensity to consume is: a. the change in disposable income divided by the change in consumption. b.consumption spending divided by disposable income. c. disposable...

2x 3xy - 4y4 x + 2y 0; -; 1. Given f(x, y) = = (x,y) = (0,0) (x, y) = (0,0) Find all the points on which f is continuous. Justify your answer.

Assume you are a business owner of a company (in any industry or sector you want to be in) and have decided, for one reason or another, that it was time to expand to a different country (of your...

What is least likely to result from splicing that creats alternative 5 ' and 3 ' UTRs?

A Stock just paid a dividend of $2.00 per share. The required return on stocks of this risk is 18.5%. The company has a policy of paying out 2/3 of its earnings as dividends. If the stock is priced...

LO1.5 List the categories of scarce resources and delineate the nature of societys economizing problem.

LO1.4 Explain the individuals economizing problem and how trade-offs, opportunity costs, and attainable combinations can be illustrated with budget lines.

=+productivity depends on growth in total factor productivity and growth in the capitallabor ratio. In particular, show that D1Y/L2 Y/L = DA A + a D1K/L2 K/L .