Q2. If C=700+0.8Yd, I= 400, Tax=10%, & G= 200, then: (A) Derive equation for AD (B)...

Q2. If C=700+0.8Yd, I= 400, Tax=10%, & G= 200, then:

(A) Derive equation for AD
(B) Determine equilibrium value of output.

(C) Calculate value of multiplier

(D) Repeat first 3 parts if Govt. spending is increased to 300
(E) Show changes through graph.

Expert Solution

Rahul Sunny answered 6 months ago

IS Data: AD = C+I+G C = $210 + 0.9YD G = $300 I = $400...

IS Data: AD = C+I+G C = $210 + 0.9YD G = $300 I = $400 – 48i YD = Y–TA+TR TR = $100 TA = 0.33Y [Note, round the AD slope to one decimal] LM Data: L = Md/P = 5Y – 150i Ms/P = $8,750 If Government uses fiscal policy to increase spending from $300 to $420; find the new equilibrium values for i and Y

Given the following: Y= C + I + G. C= 50 + 0.8Yd I= 160 G=...

Given the following: Y= C + I + G. C= 50 + 0.8Yd I= 160 G= 150, T = 200 Determine the equilibrium level of output (Y). Calculate Yd, C, S. Calculate the expenditure\ tax multiplier. Now suppose that the potential GDP equals 1100, By how much would government spending\ tax need to change to close the gap?

1. (A-D) A) a = 400 b = .9 I = 300 G = 200 T...

1. (A-D) A) a = 400 b = .9 I = 300 G = 200 T = 150 (b = MPC) a) Solve for Y* (equilibrium output) b) What is the value of the spending (Keynesian) multiplier? c) What is the value of the tax multiplier? d) What is the value of the 'balanced budget' multiplier? B) a = 400 b = .9 I = 300 G = 300 (an increase of 100 from A above) T = 150 a)...

a. Pentane (200 g) is combusted to produce CO2. Derive and balance the chemical equation for...

a. Pentane (200 g) is combusted to produce CO2. Derive and balance the chemical equation for this reaction. List the oxidation state of all species. (3 points) b. All of the CO2 produced in the combustion is taken up by plants during photosynthesis to produce glucose and oxygen. Derive the balanced equation. (3 points) c. How many grams of glucose are produced from the 200 g of pentane combusted? (3 points)

ISLM-Model Y=C(Y-T)+I(r)+G How can I analytically (and step by step) derive from this equation that the...

ISLM-Model Y=C(Y-T)+I(r)+G How can I analytically (and step by step) derive from this equation that the IS curve slopes downwards? Please explain thoroughly. TIA

At 200°C, Kc = 1.6*10−10 for: N2O(g) + NO2(g) ⇌ 3 NO(g). If 350 mL of...

At 200°C, Kc = 1.6*10−10 for: N2O(g) + NO2(g) ⇌ 3 NO(g). If 350 mL of NO measured at 797 torr and 25.0°C is placed into a 3.00 L container, what will be the molarity of N2O at equilibrium when the reaction is heated to 200°C? what is the total equilibrium pressure, in units of torr at 200°C?

c = 100 + 0.8 (y - t) i = 500 - 50r g = 400...

c = 100 + 0.8 (y - t) i = 500 - 50r g = 400 t = 400 Md = P(0.2y + 500 – 25r) Price level is fixed at 1. The money supply is 520 The government increases taxes by one unit. Calculate the shift of the IS curve. What is the change in the level of aggregate demand? What is the change in the interest rate and investment? What is the change in disposable income and consumer...

Suppose that C = 800, I = 300, G = 200, and X = -100.

Suppose that C = 800, I = 300, G = 200, and X = -100. a. Calculate GDP. b. Calculate each of the four components of GDP. c. Suppose G increases to 300 and GDP increases to 1,500. What is the new government component?

In the open economy equation Y=C+I+G+NX a. Does C, as used in the above equation, include...

In the open economy equation Y=C+I+G+NX a. Does C, as used in the above equation, include imported goods and why? b. Does I, as used in the above equation, include exported goods and why? c. What is NX? Why do we need this term in this equation?

Y= C + I + G C= 170 + 0.6( Y-T ) where T= 200+0.2Y I=...

Y= C + I + G C= 170 + 0.6( Y-T ) where T= 200+0.2Y I= 100-4r G=350 ( M/p) d= 0.75Y-6r (Ms/P)= 735 1) What is the new equilibrium level of Y and r if the central bank increases money supply by 8%. 2) What is the new equilibrium level of Y and r if government spending is increased to 500 & central bank increases money supply by 8% 3) What is the new equilibrium level of Y and...

Question