Question

The table below provides information for the economy of Zawi.
 

C = 25 + 0.6YXN = 15 − 0.1Y
I = 100G = 100


a. The value of equilibrium income is $ 

b. Set up a balancing row to verify your calculations (the tax equation is T = 80 + 0.15Y and X = 210). Enter your responses as whole numbers.
 

YTYDCSIGXIMXNAE

 
c. If exports decrease by 60, the new equilibrium income is $ 
 


3 0
Add a comment Improve this question Transcribed image text
✔ Recommended Answer
Answer #1

ANSWER :


a.


Equilibrium income, Y 

= C + I + G + X net 

= 25 + 0.6Y + 100 + 100 + 15 - 0.1y

= 240 + 0.5Y

=> Y - 0.5Y = 240

=> 0.5Y = 240 

=> Y = 480 (ANSWER)


b. 


T = 80 + 0.15Y = 80 + 0.15*480 = 152 

C = 25 + 0.6Y = 25 + 0.6*480 = 313

X net = 15 - 0.1Y = 15 - 0.1*480 = - 33 

=> IM = X - X net = 210 - (-33) = 243 



  Y        T         Yd          C          S           I           G             X         IM


480    152      328       313        15       100        100          210       243   



Check : Y = C + I + G + X - IM = 313 + 100 + 100 + 210 - 243 = 480 (OK)


c. 


If X decreases by 60, Y also decrease by 60.

So, new equilibrium income = 480 - 60 = 420 (ANSWER).

answered by: Tulsiram Garg
Add a comment
Know the answer?
Add Answer to:
The table below provides information for the economy of Zawi.
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Similar Homework Help Questions
  • Imagine the economy is defined by the consumption function of C = 140 + 0.9 (Yd)...

    Imagine the economy is defined by the consumption function of C = 140 + 0.9 (Yd) where 140 is autonomous consumption, 0.9 is marginal propensity to consume, and Yd is disposable income (after taxes) and Yd=Y-T, where Y is national income (or GDP) and T=Tax Revenues=0.3Y (0.3 is the avg. income tax rate). To find the macro equilibrium use the following equation Y = C + I + G + (X - M). Where C=140 + 0.9(Yd), I=400, G=800, X=600,...

  • macroeconomics

    The table below shows the parameters for the economy of Hutu. Give your answers to one decimal point.C = 65 + 0.6YXN = 190 − 0.1YI = 155G = 240a. The value of equilibrium income is $  .b. If exports were to increase by 35, the new value of equilibrium income would be $  .c. Given your answer in part (b), the new value for XN is $  .d. Given the equilibrium income in part (a), if full employment income is $1,000, what change in government...

  • The table below shows some of the expenditure amounts in the economy of Arkinia. The MPC,...

    The table below shows some of the expenditure amounts in the economy of Arkinia. The MPC, the MTR, and the MPM are all constant, as are the values of the three injections. a. Complete the table below. Y T YD C S I G X IM XN AE 0 50 180 50 100 60 -5 50 180 50 30 200 60 130 10 50 180 50 300 80 195 50 180 50 40 400 100 40 50 180 50 50...

  • A5-10. Suppose the following aggregate expenditure model describes an economy: C = 100 + (5/6)Yd T...

    A5-10. Suppose the following aggregate expenditure model describes an economy: C = 100 + (5/6)Yd T = (1/5)Y 1 = 200 G = 400 X = 300 IM = (1/3)Y where C is consumption, Yd is disposable income, T is taxes, Y is national income, I is investment, G is government spending, X is exports, and IM is imports. (a) Derive a numerical expression for aggregate expenditure (AE) as a function of Y. Calculate the equilibrium level of national income....

  • Consider the following Keynesian income model: E = C + I + G + X-M C...

    Consider the following Keynesian income model: E = C + I + G + X-M C = 300 + 0.85Yd Yd = Y – T T = 60 + 0.25Y; I = 400 G = 700 X = 400 M = 50 + 0.15Y In equilibrium, Y = E: a. calculate the equilibrium level of income. b. calculate the amount of taxes collected when the economy is at equilibrium level of income and show whether the government budget is in...

  • Check my world The table below shows some of the expenditure amounts in the economy of...

    Check my world The table below shows some of the expenditure amounts in the economy of Arkinia. The MPC, the MTR, and the MPM are all constant, as are the values of the three injections. a. Complete the table below. I IM XN 30 Y T YD C $ II 50 100 60 -5 50 200 60 T T 130 | 10 | 50 300 88 TL 195 LEI 400 102 40 500 DI 325 OL 50 600 460 TD...

  • Suppose an inflationary economy can be described by the following equations representing the goods and money...

    Suppose an inflationary economy can be described by the following equations representing the goods and money markets: C = 20 + 0.7Yd M = 0.4Yd I = 70 – 0.1r T = 0.1Y G = 100 X = 20 Ld = 389 + 0.7Y – 0.6r Ls = 145 where G represents government expenditure, M is imports, X is exports, Y is national income, Yd is disposable income, T is government taxes (net of transfer payments), I is investment, r...

  • ONLY 5-11 BELOW A5-10. Suppose the following aggregate expenditure model describes an economy: C = 100...

    ONLY 5-11 BELOW A5-10. Suppose the following aggregate expenditure model describes an economy: C = 100 + (5/6)Yd T = (1/5)Y I = 200 G = 400 X = 300 IM = (1/3)Y where C is consumption, Yd is disposable income, T is taxes, Y is national income, I is investment, G is government spending, X is exports, and IM is imports. (a) Derive a numerical expression for aggregate expenditure (AE) as a function of Y. Calculate the equilibrium level...

  • 1. Consider an economy where aggregate expenditures can be characterized by the following information: household consumption...

    1. Consider an economy where aggregate expenditures can be characterized by the following information: household consumption C = 100+ 0.8Yd, investment expenditure 1 = 100, government expenditure G = 300, exports X = 300 and imports IM = 0.14Y. Suppose that the income tax rate is 20%, and that the government has no initial debt, so that D = 0. (a) Solve for the AE function and the equilibrium level of national output Y. (b) Solve for the government's budget...

  • We assume that the relationships in the text below describe an economy. It is a closed economy with a given (fixed) pric...

    We assume that the relationships in the text below describe an economy. It is a closed economy with a given (fixed) price-level and with a variable interest rate (the interest rate is given with a whole value ex. 10% is 10 and not 0,1). C = 425 + 0,4 YD T = 100 G = 140 I = 100 + 0,1 Y – 50r MD = L(r;Y) = Y – 100r MS M/P = 200 YD = (Y-T) Find the...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
Active Questions
ADVERTISEMENT