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

question 43

Essay

Answer the following questions using the aggregate expenditures model of the economy described below.C = 90 + .7Yd
T = 50 + .2Y
Ia = 36
Ga = 45
Xa = 62
M = .16Y
(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 $350.Does a recessionary gap or an inflationary gap exist? How can the government eliminate the gap by altering government expenditures?

---

Definitions:

Government

The system or group of people governing an organized community, often a state.

Corporate Social Responsibility

A form of corporate self-regulation used to further some social good beyond the requirements of law.

Company Culture

The shared values, beliefs, and practices of a company's employees that shape its work environment and identity.

Stretch Goal

An ambitious target that goes beyond what is considered standard or expected, aimed at pushing performance to higher achievements.