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HW_chap_14[1]

# HW_chap_14[1] - 3 a Fill out the table below The...

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Econ 100 San Francisco State HW Chapter 14 You do not need to turn this problem in to me, but you can assume that there will be problems very similar to it in either a quiz or an exam. It would greatly benefit your to do it. 1) a) Let’s say a country’s autonomous spending is \$400 billion, and their marginal propensity to consume is .6. What is their consumption function (in billions)? b) What would their consumption be if their disposable income was: i. \$800 billion ii. \$850 billion iii. \$900 billion 2) If a country’s consumption function is C = \$700 + .4 x YD (in billions), what is their autonomous spending? What is their marginal propensity to consume?
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Unformatted text preview: 3) a) Fill out the table below. The consumption function is: C = \$100 + .5 x YD (billions). At what level of real GDP would this economy be at equilibrium? (Table is in billions.) Real GDP YD C I planned AE planned I unplanned 0 200 200 200 400 200 600 200 800 200 1000 200 b) Lets say that for whatever reason businesses decided to decrease their planned investment from \$200 billion to nothing. Fill out the table below (which is also in billions) and find the new equilibrium for the economy: Real GDP AE planned (origional) AE planned (after \$200 billion decrease in I planned ) 0 200 400 600 800 1000...
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