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Macroeconomics 6th Edition by Robert Hall,Marc Lieberman
Edition 6ISBN: 978-1111822354Macroeconomics 6th Edition by Robert Hall,Marc Lieberman
Edition 6ISBN: 978-1111822354 Exercise 2
a. Complete the following table when autonomous consumption is $30 billion, the marginal propensity\ to consume is 0.85, and net taxes are $0.
b. Use your answers in part (a) and assume planned investment is $40 billion, government spending is $20 billion, exports are $20 billion, and imports are $35 billion. Complete the table at the bottom of the page.
c. Plot a 45° line, and then use your data to draw an aggregate expenditure line.
d. What is the equilibrium level of real GDP? Illustrate it on your diagram.
e. What will happen if the actual level of real GDP in this economy is $200 billion?
f. What will happen if the planned investment in this economy falls to $25 billion?
b. Use your answers in part (a) and assume planned investment is $40 billion, government spending is $20 billion, exports are $20 billion, and imports are $35 billion. Complete the table at the bottom of the page.
c. Plot a 45° line, and then use your data to draw an aggregate expenditure line.
d. What is the equilibrium level of real GDP? Illustrate it on your diagram.
e. What will happen if the actual level of real GDP in this economy is $200 billion?
f. What will happen if the planned investment in this economy falls to $25 billion?
Explanation
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a. Given autonomous consumption is $30 b...
Macroeconomics 6th Edition by Robert Hall,Marc Lieberman
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