QUESTION NO. 3 Complete the following table and estimate the equilibrium levels of output and employment in this private closed economy, assuming that the level of investment is $16 billion and is independent of the level of total output. Employment (Millions) 40 45 50 55 60 65 70 75 80 GDP DI (Billions) 240 260 280 300 320 340 360 380 400 Consumption (Billions) 244 260 276 292 308 324 340 356 372 Aggregate Expenditures (Billions) Investment Saving (Billions) (Billions)
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- In two sectoral economy reflect if the revenues generated by one sector are equal to the expenditures of the other sector using circular flow diagram. (150-500 Word limit)stion 11 A nation's potential output/GDP is best described as: The maximum growth rate of output/GDP a nation can sustain by keeping taxes low. The maximum level of output/GDP which can be produced with a nation's resources. A high-employment level of output/GDP. The maximum growth rate of output/GDP a nation can sustain by keeping both taxes and interest rates low. The maximum growth rate of output/GDP a nation can sustain by keeping interest rates low. Moving to the next question prevents changes to this answer. JUL 20 tv 11 MacBook Pro O □ AConsider the following NIPA data for 1Q2021 (First Quarter 20210 $ billlion) Investment: Non Residential $2,948.3 Exports $2,305.3 PCE Goods $5,183.5 Investment: Residential $1,043.7 Government Expendiures Federal $1,557.0 PCE Services $9,857.7 Imports $3,152.3 Governemnt Expenditures : State and local Goernent Expenditures $2,395.9 Change in private inventories -$90.1 2a. Compute the weights of each of PCE, GPDI, NX and GOV) in GDP 2b. Consider the following rates of change (%) for each of the above items. % change PCE 10.70% GPDI -5.00% NX -6.80% GOV 6.30%
- Consider the following NIPA data for 1Q2021 (First Quarter 20210 $ billlion) Investment: Non Residential $2,948.3 Exports $2,305.3 PCE Goods $5,183.5 Investment: Residential $1,043.7 Government Expendiures Federal $1,557.0 PCE Services $9,857.7 Imports $3,152.3 Governemnt Expenditures : State and local Goernent Expenditures $2,395.9 Change in private inventories -$90.1 1. Write the formula for GDP Compute the following: 2. Personal Consumption Expenditures (PCE): 3. Gross Private Domestic Investment (GPDI) 4. Net Exports (NX) 5. Government Expenditures (GOV) 6. GDPThe table below shows the data for the country of Magnolia. Complete the national income accounting framework by filling in the missing data. Remember to enter a minus (-) sign to indicate negative values. Expenditures Consumption Gross investment Government spending Net exports Gross domestic product at market prices 100 Less depreciation Less indirect taxes (net of subsidies) Net domestic product at basic prices +/- net foreign factor income Net national product at basic prices 320 350 30 260 50 160 70 1100 220 100 -10 780 320 06 160 130Define the term Projected annual net savings?
- Question 1 A simple closed economy with government sector is given by the following equations: C= 10 +0.75 Y I = 20 G = 40 where C is aggregate consumption, Y is national income, G is government expenditure on goods and services, and I is investment expenditure. Note that there are no taxes assumed in parts (a) to (c). (a) What is the equilibrium level of national income? Show all your workings. (b) What is the value of aggregate consumption and the value of aggregate savings at the equilibrium level of the national income? Show all your workings. (c) What would be the new level of national income if government expenditure increased by 10? Show all your workings and explain the mechanisms through which the economy reaches a new equilibrium. (d) If a tax rate of 1/3 of national income were introduced, what would be the new equilibrium level of national income in the economy outlined above. Show all your workings and explain the mechanisms through which the economy reaches the new…1.2. In the table below is data for a hypothetical private-closed economy. Table 1 A Private Closed Economy Real domestic output (GDP=DI) (billions) Consumption (billions) Saving (billions) Investment (billions) Aggregate Expenditures (billions) $240 260 280 300 320 340 360 380 400 $244 260 276 292 308 324 340 356 372 $ -4 0 4 8 12 16 20 24 28 $16 16 16 16 16 16 16 16 16 $260 276 292 308 324 340 356 372 388 Recall, private means that there is no government and closed means that there is no foreign trade. Use the information in the Table 1 to analyze aggregate expenditures (AE) model below (Figure 1. Equilibrium in a Private Closed Economy). Figure 1. Equilibrium in a Private Closed Economy 1.3. Identify the mistake and explain why the graph of the aggregate expenditures line does not correctly illustrate the economy's equilibrium. (See attached picture)1.2. In the table below is data for a hypothetical private-closed economy. Table 1 A Private Closed Economy Real domestic output (GDP=DI) (billions) Consumption (billions) Saving (billions) Investment (billions) Aggregate Expenditures (billions) $240 260 280 300 320 340 360 380 400 $244 260 276 292 308 324 340 356 372 $ -4 0 4 8 12 16 20 24 28 $16 16 16 16 16 16 16 16 16 $260 276 292 308 324 340 356 372 388 Recall, private means that there is no government and closed means that there is no foreign trade. Use the information in the Table 1 to analyze aggregate expenditures (AE) model below (Figure 1. Equilibrium in a Private Closed Economy). Figure 1. Equilibrium in a Private Closed Economy See the attached graph. 1.3. Identify the mistake and explain why the graph of the aggregate expenditures line does not correctly illustrate the economy's equilibrium. 1.4. Create a graph for the aggregate expenditures…
- The data in columns 1 and 2 in the table below are for a private closed economy. (1) Real Domestic Output (GDP - DI), Billions (2) Aggregate Expenditures, Private Closed Economy, Billions (5) Net Exports, Billions (6) Aggregate Expenditures, Private Open Economy, Billions (3) Exports, Billions (4) Imports, Billions $300 $340 $30 $20 350 380 30 20 400 420 30 20 450 460 30 20 500 500 30 20 550 540 30 20 600 580 30 20 650 620 30 20 a. Use columns 1 and 2 to determine the equilibrium GDP for this hypothetical economy. billion b. Now open up this economy to international trade by including the export and import figures of columns 3 and 4. Fill in the gray-shaded cells in columns 5 and 6. Instructions: Enter your answers as a whole number. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. What is the equilibrium GDP for the open economy? billion What is the change in equilibrium GDP caused by the addition of net exports? billion c.…National Income DeterminationThe following figures are from data on Good Island EconomyItems $mNet private investment 940Depreciation 56Compensation of employees 2 256Corporate taxes 416Personal taxes 756Personal Consumption expenditure 4 386Government purchases 3 182Indirect business taxes minus subsidies 482Payment of factor income to the rest of the world 95Corporate profits minus dividends 56Government transfer payments and interest 243Exports 855Receipts of factor income from abroad 186Imports of goods and services 385Social insurance payments 332 Required: Use the above information to answer the followingi.) Calculate for Good Island:a. Gross private investment b. Gross Domestic product c. Gross National Product d. Net National Product e. National income f. Personal Income g. Disposable Personal Income(a) Consider a closed economy whose desired savings (Sd) and desired investment (Id) are given by the following expressions: CC₂ rd where r denotes the real interest rate. Find the equilibrium in the Goods market for this economy, and represent it in a graph. From now on, suppose there are two large Countries in the world, say Canada (Ca) and the United States (US). Ca (b) To start with, assume that both Countries are closed economies. Their desired consumption (Cd) and desired investment (I) are given by: Cus Its Sd Id = = = = 100+ 600r 170 - 400r 10+ cca (Yca Tca) - 100r 15 - 100r 40+ cus (Yus - Tus) - 200r = 230 - 200r Moreover, output (Y), taxes (T), public expenditure (G), and the marginal propensity to consume (c) are as follows: