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?

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Definitions:

Working Batteries

Functioning power sources made up of one or more electrochemical cells, used to power various devices.

Gag Reflex

An involuntary contraction of the back of the throat triggered by an object touching the roof of the mouth, back of the tongue, or area around the tonsils.

Prone Position

Lying face down.

Suction Machine

A medical device used to remove bodily fluids such as mucus or blood from a patient's airway to prevent obstruction and support breathing.