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

question 44

Essay

Answer the following questions using the aggregate expenditures model of the economy described below.
C = 80 + .6Y_d
T = 40 + .2Y
I_a = 28
G_a = 64
X_a = 76
M = .18Y
(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 $340.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:

Middle-Ear Bones

The three small bones in the mammalian ear - the malleus, incus, and stapes - that transmit sound vibrations from the eardrum to the inner ear.

Alveoli

Small air sacs in the lungs where gas exchange between the air and blood takes place, crucial for breathing.

Vertebrae

The individual bones that make up the vertebral column (spine) in vertebrates, providing structural support and protecting the spinal cord.

Testudines

An order of reptiles that includes turtles, tortoises, and terrapins, characterized by a bony or cartilaginous shell developed from their ribs.