K Suppose that the government of Ansonia is experiencing a large budget surplus with fixed government expenditures of G = 250 and fixed taxes of T = 200. Both G and T are independent of income. Assume that consumers of Ansonia behave as described in the following consumption function. C = 300+ 0.90(Y-T) Suppose further that investment spending is fixed at 1 = 200. Calculate the equilibrium level of GDP in Ansonia. Solve for equilibrium levels of Y, C, and S. Y= (Round your response to two decimal places.)

Suppose Ausland's spending for the year can be described by the table below: Construction of New Housing $50 Private Consumption $650 Government Spending on Public $400 Private Acquisition of Capital Goods $160 Goods and Services Exports $100 GST Revenue $20 Imports $80 Marginal Propensity to Consume 0.6 Marginal Tax Rate 0.25 Marginal Propensity to Import 0.05 What is the value of Ausland's Investment (1) expenditure? Select one: O a. $50 O b. $350 O c. $160 O d. $210

Please no written by hand and no emage Suppose that in the economy under consideration the consumption function can be written as C = 200 + .8(Y – T). Furthermore, you know that taxes are autonomous and equal to $10. Now, suppose that investment spending is equal to $50 at every level of disposable income and government spending is constant and equal to $100 at every level of disposable income, suppose that (X – M) is constant and equal to $20 at every level of disposable income. (a)Draw a graph of the consumption function with respect to disposable income. Measure/show consumption spending on the vertical axis and disposable income on the horizontal axis (b) Calculate equilibrium national income Ye from the information given. (c) From the information given above is the government running a deficit or surplus budget? Explain why. (d) Full employment output in this economy (Yf) is equal to $2000 what do you predict is happening to inventories if the full employment level of output is…

4. In the economy of St. Maynard Island, autonomous consumption expenditure is $185 million, and the marginal propensity to consume is 0.75. Investment is $150 million, government expenditure is $100 million, and net taxes are $80 million. Investment, government expenditure, and taxes are constant - they do not vary with income. The island does not trade with the rest of the world. a) What is the consumption function? b) What is the aggregate expenditure function? c) What is the island's autonomous aggregate expenditure? d) What is the size of the multiplier in St. Maynard Island's economy? e) What is the island's aggregate planned expenditure and what is happening to inventories when real GDP is $1,100 million? f) What is the economy's equilibrium aggregate expenditure?

1. Suppose the households in a hypothetical economy has the following consumption function C= a + cYd.  Where  is the disposable income. The government in this economy imposes a tax rate of to households’ income (ex. A  means that 10% of households’ income goes to tax payments).   a. What is the equation that describes the disposable income of households? b. What is the Planned Expenditure Equation? Assume that government expenditure is exogenous and Investment function is given by the equation I = I-br Where  is the interest rate. c. Derive the equilibrium output in the goods market and show that the multiplier in this model is 1/1c(1-t). d. How does and the tax rate affects this multiplier (e.g., what happens to multiplier if c increases cet.par. , or if tax rate increases, cet.par)?

The formula for the government spending multiplier is A) 1/(1+ MPC). B) 1/MPS. O C) 1/MPC. O

Suppose a closed economy with no government spending which in equilibrium is producing an output and income of 2500.  Suppose also that the marginal propensity to consume is 0.80, and that, if at full employment, the economy would produce an output and income of 3900 By how much would the government need to cut taxes (T) to bring the economy to full employment?

5. Algebra of the income-expenditure model Consider a small economy that is closed to trade, so its net exports are equal to zero. Suppose that the economy has the following consumption function, where C is consumption, Y is real GDP, / is investment, G is government purchases, and T is for net taxes: C 40+0.5x (Y-T) Suppose G $265 billion, 7- $50 billion, and T $10 billion. Given the consumption function and the fact that, in a closed economy, total expenditure can be calculated as Y = C+I+G, the equilibrium output level is s billion. Suppose the government purchases are reduced by $100 billion. The new equilibrium level of output will be equal to s billion. Based on the effect of the change in government purchases on equilibrium output, you can tell that this economy's spending multiplier is equal to

Question 3 Given the following information: 1= 150, G = 150, T=150 and C = 150 +0.75(Yd) Which of the following is true? Equilibrium Output is 1550 20% is the Marginal Propensity to Consume MPC Tax Multiplier is 3 O None of the Choices O Equilibrium Output is 15 O 20% is the Marginal Propensity to Consume MPC O Tax Multiplier is 3 O At least 2 of the choices t

Figure 8-23. The figure represents the relationship between the size of a tax and the tax revenue raised by that tax. 6 on4m21 3 Tax Revenue B Tax Size Refer to Figure 8-23. If the economy is at point A on the curve, then a small increase in the tax rate will O increase the deadweight loss of the tax and increase tax revenue. O increase the deadweight loss of the tax and decrease tax revenue. decrease the deadweight loss of the tax and increase tax revenue. O decrease the deadweight loss of the tax and decrease tax revenue.