{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Ch 12 Problem Set (ECON E-202; Introduction to Macroeconomics; Wenyi Shen)

# Ch 12 Problem Set (ECON E-202; Introduction to Macroeconomics; Wenyi Shen)

This preview shows pages 1–5. Sign up to view the full content.

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

View Full Document

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

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 12 Problem Set Use the following information for all three-practice problems. GDP= Gross Domestic Product, T = taxes, D1 = Disposable Income, C = Consumption, S = Savings, I = Gross Private Domestic Investment, G = Government Spending, X = Net Exports 1. Table GDPTDICSIGX 500 100 400 420 -20 20 50 50 700 100 600 580 20 20 5C} 50 900 100 800 740 50 20 50 50 Questions Find the Consumption functiori, savings function, MPC &. MPS Find APC, APS, when DI = 500 Find equilibrium Find the autonomous spending multiplier What is the new equilibrium when 1 increases by 50 9:59.”? 2. Equations C = 0.9Dl +200 I= 100 G = 250 X= -50 T = 100 Questions 6. Find the Consumption function, savings function, MPC & MP8 7. Find APC, APS, when D] = 500 8. Find equilibrium 9. Find the autonomous spending multiplier 10. What IS the new equilibrium when I increases by 50 1 3. Graph C,I,G,X 45 Degree line 800 C+I+G+X 400 200 100 200 400 800 RGDP Questions 11. Find the Consumption function, savings function, MPC & MP3 12. Find APC, APS, when DI = 500 13. Find equilibrium 14. Find the autonomous Spending multiplier 15. What is the new equilibrium when I increases by 50 Chapter 12 Problem Set—Answer Use the following information for all three—practice problems. GDP: Gross Domestic Product, T = taxes, D1 = Disposable Income, C = Consumption, S = Savings, I = Gross Private Domestic Investment, G = Government Spending, X = Net Exports 1. Table GDP T DI C S I G X 500 100 400 420 -20 20 50 50 700 100 600 580 20 20 50 50 900 100 800 740 60 20 50 50 Questions Find the Consumption function, savings function, MPC & MPS Find APC, APS, when DI = 500 Find equilibrium Find the autonomous spending multiplier What is the new equilibrium when I increases by 50 .U‘PP’PE‘ Answers: C = 0.8DI +100, S = 0.2DI —100, MPC = 0.8, MPS = 0.2 APC = 500500 =1, APS = 01500 = 0 GDP=C+I+G+X, GDP=700 Multiplier = 1! I-MPC, Ill-0.8 = 5 Change in GDP = multiplier * change in autonomous spending Change in GDP = 5 * 50 Change in GDP = 250 New equilibrium = 700 (old equilibrium #3) + 250 New equilibrium = 950 P‘PP’E‘J’.‘ 2. Equations C = 0.9DI +200 I= 100 G = 250 X = ~50 T = 100 Questions Find the Consumption function, savings function, MPC & MPS Find APC, APS, when D1 = 500 Find equilibrium Find the autonomous spending multiplier What is the new equilibrium when 1 increases by 50 S-“PPPE‘ Answers: 6. C = 0.9DI +200, S = 0.1DI —200, MPC = 0.9, MIPS = 0.1 7. APC = 650500, APS = -150;'500 8. GDP=C+I+G+X GDP = 0.91)] +200 + 100 + 250 -50 GDP = 0.9(GDP—T) +200 + 100 + 250 —50 GDP = 0.9(GDP-100) +200 + 100 + 250 —50 GDP - 0.9GDP = 0.9(-100) + 500 0.1GDP = 500 —90 GDP = 4100 9. Multiplier = Ill—MPG, III-0.9 = 10 10. Change in GDP = multiplier * change in autonomous spending Change in GDP = 10 * 50 Change in GDP = 500 New equilibrium = 4100 (old equilibrium #8) + 500 New equilibrium = 4600 3. Graph C,I,G,X 45 Degree line 800 200 400 800 RE DP Questions 1. Find the Consumption function, savings function, MPC & MP3 2. Find APC, APS, when D1 = 500 3. Find equilibrium 4. Find the autonomous spending multiplier 5 . What is the new equilibrium when 1 increases by 50 Answers: 11. C = 0.5DI +100, S = 0.5DI —100, NIPC = 0.5, MP8 = 0.5 12. AFC = 350500, APS = 150500 GDP = C + I + G + X 13. GDP = 800 14. Multiplier = III-MPG, 1f 1-0.5 = 2 15. Change in GDP = multiplier * change in autonomous spending Change in GDP = 2 * 50 Change in GDP = 100 New equilibrium = 800 (old equilibrium #13) + 100 New equilibrium = 900 ...
View Full Document

{[ snackBarMessage ]}