Econ101fall11ps4 - Name Section T.A Name 180.101 ELEMENTS OF MACROECONOMICS Fall 2011 Problem Set#4 Prof Louis J Maccini INSTRUCTIONS Above write

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Name: Section: T.A. Name: 180.101 ELEMENTS OF MACROECONOMICS Fall, 2011 Problem Set #4 Prof. Louis J. Maccini INSTRUCTIONS: Above, write your name, section number and T. A. name. Answer each question in the space provided, or on the back of the same sheet. 1. Consider an economy in which tax collections are always $400 and in which the three components of aggregate demand are as follows: GDP Taxes Disp. Income C I G $1,360 $400 $960 $720 $230 $500 1,480 400 1,080 810 230 500 1,600 400 1,200 900 230 500 1,720 400 1,320 990 230 500 1,840 400 1,440 1080 230 500 Find the equilibrium of this economy graphically. What is the marginal propensity to consume? What is the multiplier for government purcahses? What would happen to equilibrium GDP if government purchases were reduced by $60 and the price level remained unchanged?
Background image of page 1

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

View Full DocumentRight Arrow Icon
2. Consider an economy similar to that in the preceding question in which investment is also $230, government purchases are also $500 and the price level is also fixed. But taxes now vary with income and, as a result, the consumption schedule looks like the following: GDP Taxes Disp. Income C $1,360 $320 $1,040 $810 1,480
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/12/2012 for the course ECON AS.180.101 taught by Professor Maccini during the Fall '08 term at Johns Hopkins.

Page1 / 5

Econ101fall11ps4 - Name Section T.A Name 180.101 ELEMENTS OF MACROECONOMICS Fall 2011 Problem Set#4 Prof Louis J Maccini INSTRUCTIONS Above write

This preview shows document pages 1 - 3. Sign up to view the full document.

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