ECO100Assign10 - James E. Pesando Economics 100 Assignment...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
James E. Pesando Economics 100 Assignment #10 National Income and The Multiplier 1. In a particular economy, the following relationships hold: C = 15 + .8YD T = .25Y I = 20 G = 15 X = 25 M = .1Y Treat (for simplicity) the price level as fixed. a) What is the marginal-propensity-to consume out of disposable income ? the marginal propensity to save out of disposable income ? the marginal propensity to import? b) What is the expression for the Aggregate Expenditure schedule? What does the AE schedule measure? What is the slope of the AE schedule? c) What is the equilibrium level of national income? If national income is less than this equilibrium, why will firms increase production? If national income is greater than this equilibrium, why will firms reduce production? 2. As a result of a boom in the United States, exports increase from 25 to 35. a) How will the equilibrium level of national income change? Relate your answer to the slope of the AE schedule. b)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

ECO100Assign10 - James E. Pesando Economics 100 Assignment...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online