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

question 7

Essay

Answer the following questions using the aggregate expenditures model of the economy described below.
C = 90 + .7Y_d
T = 50 + .2Y
I_a = 36
G_a = 45
X_a = 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:

Democratic

A system or process that is based on principles of equality and fairness, often involving collective decision-making.

Sales Quotas

Target sales figures assigned to sales teams or individuals to achieve within a specific time period.

Departmentalization

The organizational practice of dividing a business into separate departments, each handling specific tasks or functions.

Product

Bundle of physical, service, and symbolic attributes designed to satisfy buyers’ wants.