Design Layout References Mailings ReviewView Joheson County Community College Pr
ID: 1115569 • Letter: D
Question
Design Layout References Mailings ReviewView Joheson County Community College Problem Set WS Possible levels of empleyment (millions) Income (AE) GDP (Y)Censumptios Planned Saving Aggregate Iaventeries (billions) Spendingor Invest- ment (Billions) 8400 $800 $400 $700 5500 10 1 ,200 1,600 $1,300 600 35 Fill in the above table for this closed, private economy. Assume that planned investment is S500 billion. Use the table to answer the following: a. What is the value of the MPC? MPS? 1. Highlight macro equilibrium in the table. a. What is the employment level in equilibrium? b. What is our equilibrium Y amount? c. What's true of savings and investment at this level of income? 2. At the S800 level of income, how much is saving, investment? Planned a. What's happening to inventories-going up or down and by how much? b. In this situation, is there a tendency for employment, output and income in the economy to increase or decrease and why? What is saving and actual investment at the $800 level of income? (Include "how" you get your answer, don't just type a number.) c.Explanation / Answer
Emplyment(millions) Y C Ip S AE DELI 5 400 400 500 0 900 -500 7 800 700 500 100 1200 -400 10 1200 1000 500 200 1500 -300 14 1600 1300 500 300 1800 -200 18 2000 1600 500 400 2100 -100 22 2400 1900 500 500 2400 0 28 2800 2200 500 600 2700 100 35 3200 2500 500 700 3000 200 a) MPC = del C/delY =300/400 0.75 MPS = 1-MPC MPS =0.25 1. EQUILIBRIUM AT AE =Y. a) employment at equilibrium = 22 millions b) Equilibrium Y =2400 billions c) Saving = 500 = investment. 2 AT Y = $800, Saving =100 Planned investment = 500 a) Inventories going down by $400 b) Increase because AE is above Y c) Saving = 100 and actual investment=-400(Y-AE at Y=800)