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

question 2

Essay

Answer the following questions using the aggregate expenditures model of the economy described below.
C = 100 + .8Y_d
T = 60 + .25Y
I_a = 28
G_a = 48
X_a = 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:

Squamous

Relating to or resembling a scale or scales; flat cells that are typically found in the lining of the mouth, airways, and blood vessels.

Hypoglossal Canal

A canal in the skull that transmits the hypoglossal nerve from the brain to the muscles of the tongue.

Jugular Foramen

A large opening in the base of the skull, through which the internal jugular vein and several important nerves pass.

Sella Turcica

A saddle-shaped depression in the sphenoid bone at the base of the human skull, which houses the pituitary gland.