Answer the Following Questions Using the Aggregate Expenditures Model of the Economy

question 37

Essay

Answer the following questions using the aggregate expenditures model of the economy described below.C = 100 + .8Yd
T = 60 + .25Y
Ia = 28
Ga = 48
Xa = 54
M = .1Y
(a) What are the marginal propensity to consume, the marginal tax rate, and the marginal propensity to import?
(b) What is the saving function? What is the marginal propensity to save?
(c) What is the aggregate expenditure function? What is autonomous expenditure? What is the marginal propensity to withdraw?
(d) What is the equilibrium level of real GDP?
(e) What is the size of the multiplier?
(f) Suppose the full employment level of real GDP is $380.Does a recessionary gap or an inflationary gap exist? How can the government eliminate the gap by altering government expenditures?

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Definitions:

Greek Letter

Symbols from the Greek alphabet used in mathematics, science, and engineering to represent variables, parameters, and specific values.

Coefficient Alpha

Coefficient Alpha, often denoted as Cronbach's alpha, is a measure used to assess the reliability, or internal consistency, of a set of scale or test items.

Internal Consistency Reliability

A measure of how well the items in a test measure the same concept or construct, indicating the extent to which all items in a test contribute equally to the final score.

Parallel Forms Reliability

The consistency of scores on two different but equivalent forms of the same test, assessing the consistency of results over different versions of instruments.