Macroeconomics Quiz 1 Homework 01.docx - Homework 01 Lessons 01 and 02 100 points This homework is composed of multiple choice fill-in-the-blank and

# Macroeconomics Quiz 1 Homework 01.docx - Homework 01...

This preview shows page 1 - 3 out of 11 pages. Question 3 3 / 3 pts Suppose that the stock market rallies so that WRE/S increases to 22,000. Additionally, consumer confidence (CC) rises to 100. Re-solve for C in terms of Y d . Select the correct equation. C = 765 + .64 Y d C = 720 + .65 Y d C = 930 + .60 Y d None of these are correct C = 880 + .60 Y d Question 4 3 / 3 pts Now suppose disposable income (Y d ) falls due to a tax increase (Uncle Sam is trying to balance the budget) to 1800. Solve for the level of consumption using the equation you found in question #3. Consumption (C) is equal to: Question 5 3 / 3 pts Now we will calculate the level of consumption that would have occurred if Uncle Sam did not raise taxes. In other words, use the equation you found in question 3, but keep Y d at its original value of 2000. Consumption (C) is equal to: Question 6 3 / 3 pts Look at the consumption values you calculated in #2 and #4. The percent change in consumption between those values is: _________% NOTE: There is no graphing component to be collected for this homework. However, you should be comfortable graphing the equations you found in #1 and #3. You should also be able to plot the points you found in #2, #4 and #5.  #### You've reached the end of your free preview.

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