In the Keynesian cross model, assume that the consumption function is given by C = $220 + 0.7(Y – T) Planned investment is $50; government purchases and taxes are both $100. d. What level of government purchases is needed to achieve an income of $1080? Assume taxes remain at $100. G=$ e. What level of taxes is needed to achieve an income of $1080? Assume government purchases remain at S100.
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- In the Keynesian cross, assume that the consumption function is given by C = 200 + 0.75 (Y − T). Planned investment is 100; government purchases and taxes are both 100. What level of government purchases is needed to achieve an income of 1,600?In the Keynesian cross model, assume that the consumption function is given by C = 20 + 0.8(Y- T). Planned investment is 200; government purchases and taxes are both 400. There is no foreign trade. An economist has claimed that the full employment level of output is 2,400. How much should the government expenditure or taxes rise or fall to achieve full employment?In the Keynesian cross model, assume that the consumption function is given by c= $220 + 0.7(Y – T) Planned investment is $50; government purchases and taxes are both SI00. c. If government purchases increase to $115, what is the new equilibrium income? What is the multiplier for government purchases? new Y=S multiplier:
- When income is zero within the Keynesian cross model planned expenditure will be greater than zero and the intercept of the consumption function will hence not be zero either. The reason for this feature of the model is that either: The Marginal Propensity to Save (MPS) is greater than 0.5 The Marginal Propensity to Consume (MPC) is greater than 0.5 Autonomous consumer expenditure depends only on the level of national income Autonomous consumer expenditure does not depend on the level of national incomeOnly one answer can be correct. Please pick one and explain your reasoning.In the Keynesian cross, assume that the consumption function is given by C = 200 + 0.75 (Y − T ). Planned investment is 100; government purchases and taxes are both 100. A. What is the equilibrium level of income? B. If government purchases increase to 125, what is the new equilibrium income? C. What level of government purchases is needed to achieve an income of 1,600?Use the Keynesian Model to answer this set of questions. 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 Y, 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 (Y) is equal to $2000 what do you predict is happening to inventories if the full employment level of…
- Consider the Keynesian consumption function Yt =B₁ + B₂x2t + εt ( where yt is per capita consumption, and x2+ is per capita income. The coefficient B₂ is interpreted causally as the marginal propensity to consume, and we expect 0Suppose we have the following information for the simple (fixed r, fixed P, fixed W) Keynesian model. C = 400 + 0.8 I = 310 G = 140 = 400 + 0.8 (Y - T) T = 200, where C is the consumption function, (Y - T) is disposable income, I is investment, G is government spending, and T is taxes If (disposable income) increased by $200, C would Group of answer choices A) increase by $160. B) increase by $150. C) increase by $135. D) decrease by $40. E) increase by $200.In a Keynesian cross diagram, if the government decreases the tax rate, or makes the leakage of taxation less a) the aggregate expenditure function will shift to the left, but its slope will not change b) the aggregate expenditure function will shift to the right, but its slope will not change c) the slope of the aggregate expenditure function will increase and increases the point at which it crosses the 45 degree line where Aggregate Output is equal to Aggregate Expenditures d) the slope of the aggregate expenditure function will decreaseSuppose we have the following information for the simple (fixed r, fixed P, fixed W) Keynesian model. C = 400 + 0.8 I = 310 G = 140 = 400 + 0.8 (Y - T) T = 200, where C is the consumption function, (Y - T) is disposable income, I is investment, G is government spending, and T is taxes If government spending increased by $80, equilibrium Y would Group of answer choices A) increase by $400. B) decrease by $160. C) increase by $80. D) increase by $320. E) increase by approximately $106.67.Which of the following statements about the Keynesian framework are accurate? a)Keynes posited a linear Consumption function C=Ca + mpcYd, where C is total desired consumption spending, Ca is consumption spending independent of income and Yd is disposable income and mpc is marginal propensity to consume b) In the C=Ca +mpcYd the Ca is the vertical axis intercept parameter, and mpc is the slope parameter. c) Keynes also posited that Investment spending was a function of expectations and the interest rate. d) In the Keynesian investment function the firm's estimated profitability of potential investment projects were determined by expectations of future sales and costs. e) Businesses would invest in those projects whose estimated profitability was greater than the market rate of interest. f) If the firms don't have the cash, they will borrow funds and earn the difference between the rate of return on the project and the lower market rate of interest. If they have more cash than needed…Consider the Keynesian consumption function Yt =B₁ + B₂x2+ + Et ( where y, is per capita consumption, and x2+ is per capita income. The coefficient ₂ is interpreted causally as the marginal propensity to consume, and we expect 0 < ₂ < 1. At the same time, X2t = Yt + Z2t where Z2, denotes per capita investment. Assume for now that investment is exogenous and Cov(Et, 22t) = E[EtZ2+] = 0 Darixe, the: show steps reduced form X2t Yt = = B₁ 1- B₂ B₁ 1-₂ + + 1 1-₂ B₂ 1-₂ -Z2t + -Z2t + ( 1 1- B₂ 1 1-₂ -Et -EtSEE MORE QUESTIONS