Deck 30: Appendix-finding Equilibrium GDP Algebraically

Question 1

If autonomous consumption is $1,000,the MPC is 0.75,net taxes are $500,investment spending is $800,and government purchases equals $500,and NX = $0,what is equilibrium GDP?

A) $1,800
B) $1,925
C) $2,566.7
D) $7,200
E) $7,700

Answer 1

$7,700

Question 2

If autonomous consumption is $5,000,the MPC is 0.7,net taxes are $2,000,investment spending is $4,000,and government purchases equal $2,500,and NX = $0,what is equilibrium GDP?

A) $14,428.6
B) $33,666.7
C) $40,800
D) $43,000
E) $45,000

Answer 2

$33,666.7

Question 3

If I = $2,000,G = $4,000,T = $1,000,NX = $0,autonomous consumption = $1,000 and the marginal propensity to consume is 0.6,what is the equilibrium value of output?

A) $16,000
B) $7,000
C) $6,400
D) $3,840
E) $8,000

Answer 3

$16,000

Question 4

If net taxes are included in the model,the equation that shows consumption at each level of income is: C = a + b(Y - T)or C = a + bY - bT.