SlideShare une entreprise Scribd logo
1  sur  1
Télécharger pour lire hors ligne
Intro Level Macroeconomics - Aggregate Expenditure Question Part 1: AE Problem (11
questions worth 3 points each for a total of 33 points). Suppose the initial conditions of the
economy are characterized by the following equations in black font. We then shock the economy
as shown in the red font. Where: a0 = 50, a1 = .60, a2 = .05, a3 = .10, a4 = .5, a5 = -400, b0 =
100, b1 = .5, b2 = .2, b3 = -50 Use the initial conditions above to get expressions for the
Consumption function, Investment and the AE equation. Fill in the intercept and slope values to
correctly complete the consumption function: AE = 2. What is the value of Investment: I = 3. Fill
in the intercept and slope values to correctly complete the AE equation: AE = 4. The value of
equilibrium output (Y) = 5. The value of equilibrium consumption (C) =
Solution
Aggregate expenditure is equal to the sum of consumption, investment, government expenditures
and exports minus imports.
AE = C+I+G+(X-M)
AE = 50+0.6(Y-200)+0.5(10000)+0.1(15000)+0.5(120)-400(4) +100+0.5(140)+0.2(1500)-50(4)
+ 200-400
AE = 4960+0.6Y
1) C= 4890+0.6Y
2) Investment=100+0.5(140)+0.2(1500)-50(4)
Investment = 270
3) AE = 4960+0.6Y
4) Y=4960+0.6Y
0.4Y=4960
Y=12400
5) C= 4890+0.6Y
C=12330

Contenu connexe

Plus de aienterpresses

Introduction to embedded systems using the msp430 6.1 Enumerate the .pdf
Introduction to embedded systems using the msp430 6.1 Enumerate the .pdfIntroduction to embedded systems using the msp430 6.1 Enumerate the .pdf
Introduction to embedded systems using the msp430 6.1 Enumerate the .pdf
aienterpresses
 
Introduction to embedded systems using the msp430 6. 1 Enumerate the.pdf
Introduction to embedded systems using the msp430 6. 1 Enumerate the.pdfIntroduction to embedded systems using the msp430 6. 1 Enumerate the.pdf
Introduction to embedded systems using the msp430 6. 1 Enumerate the.pdf
aienterpresses
 
Intro to surveying1. What are the three primary components of the .pdf
Intro to surveying1. What are the three primary components of the .pdfIntro to surveying1. What are the three primary components of the .pdf
Intro to surveying1. What are the three primary components of the .pdf
aienterpresses
 
Interpret the significant impact of New Public Management on Non-Pro.pdf
Interpret the significant impact of New Public Management on Non-Pro.pdfInterpret the significant impact of New Public Management on Non-Pro.pdf
Interpret the significant impact of New Public Management on Non-Pro.pdf
aienterpresses
 
Interest rates keep dropping. In my country in northern Europe we no.pdf
Interest rates keep dropping. In my country in northern Europe we no.pdfInterest rates keep dropping. In my country in northern Europe we no.pdf
Interest rates keep dropping. In my country in northern Europe we no.pdf
aienterpresses
 
Interest Rate SensitivityA bond trader purchased each of the follo.pdf
Interest Rate SensitivityA bond trader purchased each of the follo.pdfInterest Rate SensitivityA bond trader purchased each of the follo.pdf
Interest Rate SensitivityA bond trader purchased each of the follo.pdf
aienterpresses
 
Infrastructure Analysis In 1-2 pages, evaluate the infrastructure o.pdf
Infrastructure Analysis In 1-2 pages, evaluate the infrastructure o.pdfInfrastructure Analysis In 1-2 pages, evaluate the infrastructure o.pdf
Infrastructure Analysis In 1-2 pages, evaluate the infrastructure o.pdf
aienterpresses
 

Plus de aienterpresses (20)

Is 4a3b6 a polynomial Why or Why notSolutionit is a polynomia.pdf
Is 4a3b6 a polynomial Why or Why notSolutionit is a polynomia.pdfIs 4a3b6 a polynomial Why or Why notSolutionit is a polynomia.pdf
Is 4a3b6 a polynomial Why or Why notSolutionit is a polynomia.pdf
 
IQ test scores on a certain IQ scale are normally distributed with a.pdf
IQ test scores on a certain IQ scale are normally distributed with a.pdfIQ test scores on a certain IQ scale are normally distributed with a.pdf
IQ test scores on a certain IQ scale are normally distributed with a.pdf
 
Ion channels are membrane-spanning proteins that allow the flow of i.pdf
Ion channels are membrane-spanning proteins that allow the flow of i.pdfIon channels are membrane-spanning proteins that allow the flow of i.pdf
Ion channels are membrane-spanning proteins that allow the flow of i.pdf
 
involving the computation of probabilities for a Bernoulli trial. .pdf
involving the computation of probabilities for a Bernoulli trial. .pdfinvolving the computation of probabilities for a Bernoulli trial. .pdf
involving the computation of probabilities for a Bernoulli trial. .pdf
 
Investment companies are specialized financial intermediaries that p.pdf
Investment companies are specialized financial intermediaries that p.pdfInvestment companies are specialized financial intermediaries that p.pdf
Investment companies are specialized financial intermediaries that p.pdf
 
Introduction to embedded systems using the msp430 6.1 Enumerate the .pdf
Introduction to embedded systems using the msp430 6.1 Enumerate the .pdfIntroduction to embedded systems using the msp430 6.1 Enumerate the .pdf
Introduction to embedded systems using the msp430 6.1 Enumerate the .pdf
 
Introduction to embedded systems using the msp430 6. 1 Enumerate the.pdf
Introduction to embedded systems using the msp430 6. 1 Enumerate the.pdfIntroduction to embedded systems using the msp430 6. 1 Enumerate the.pdf
Introduction to embedded systems using the msp430 6. 1 Enumerate the.pdf
 
introduce and summarize return on investment (ROI)SolutionRetu.pdf
introduce and summarize return on investment (ROI)SolutionRetu.pdfintroduce and summarize return on investment (ROI)SolutionRetu.pdf
introduce and summarize return on investment (ROI)SolutionRetu.pdf
 
Intro to surveying1. What are the three primary components of the .pdf
Intro to surveying1. What are the three primary components of the .pdfIntro to surveying1. What are the three primary components of the .pdf
Intro to surveying1. What are the three primary components of the .pdf
 
Interpret the significant impact of New Public Management on Non-Pro.pdf
Interpret the significant impact of New Public Management on Non-Pro.pdfInterpret the significant impact of New Public Management on Non-Pro.pdf
Interpret the significant impact of New Public Management on Non-Pro.pdf
 
Interpretation of the main effects must be made taking into consider.pdf
Interpretation of the main effects must be made taking into consider.pdfInterpretation of the main effects must be made taking into consider.pdf
Interpretation of the main effects must be made taking into consider.pdf
 
International Accounting Standard (IAS) 28 states that the ability t.pdf
International Accounting Standard (IAS) 28 states that the ability t.pdfInternational Accounting Standard (IAS) 28 states that the ability t.pdf
International Accounting Standard (IAS) 28 states that the ability t.pdf
 
Interest rates keep dropping. In my country in northern Europe we no.pdf
Interest rates keep dropping. In my country in northern Europe we no.pdfInterest rates keep dropping. In my country in northern Europe we no.pdf
Interest rates keep dropping. In my country in northern Europe we no.pdf
 
Interest Rate SensitivityA bond trader purchased each of the follo.pdf
Interest Rate SensitivityA bond trader purchased each of the follo.pdfInterest Rate SensitivityA bond trader purchased each of the follo.pdf
Interest Rate SensitivityA bond trader purchased each of the follo.pdf
 
Interest rate have been at their historic lows in japan, Europe, and.pdf
Interest rate have been at their historic lows in japan, Europe, and.pdfInterest rate have been at their historic lows in japan, Europe, and.pdf
Interest rate have been at their historic lows in japan, Europe, and.pdf
 
Internal auditing is a company function thatSelect oneA. Audit.pdf
Internal auditing is a company function thatSelect oneA. Audit.pdfInternal auditing is a company function thatSelect oneA. Audit.pdf
Internal auditing is a company function thatSelect oneA. Audit.pdf
 
Intel is one of the largest semiconductor manufacturers in the world.pdf
Intel is one of the largest semiconductor manufacturers in the world.pdfIntel is one of the largest semiconductor manufacturers in the world.pdf
Intel is one of the largest semiconductor manufacturers in the world.pdf
 
Infrastructure Analysis In 1-2 pages, evaluate the infrastructure o.pdf
Infrastructure Analysis In 1-2 pages, evaluate the infrastructure o.pdfInfrastructure Analysis In 1-2 pages, evaluate the infrastructure o.pdf
Infrastructure Analysis In 1-2 pages, evaluate the infrastructure o.pdf
 
Insist on yourself, never imitate......every great manis unique.pdf
Insist on yourself, never imitate......every great manis unique.pdfInsist on yourself, never imitate......every great manis unique.pdf
Insist on yourself, never imitate......every great manis unique.pdf
 
Information is given about a polynomial f(x) whose coefficients are .pdf
Information is given about a polynomial f(x) whose coefficients are .pdfInformation is given about a polynomial f(x) whose coefficients are .pdf
Information is given about a polynomial f(x) whose coefficients are .pdf
 

Dernier

Salient Features of India constitution especially power and functions
Salient Features of India constitution especially power and functionsSalient Features of India constitution especially power and functions
Salient Features of India constitution especially power and functions
KarakKing
 
The basics of sentences session 3pptx.pptx
The basics of sentences session 3pptx.pptxThe basics of sentences session 3pptx.pptx
The basics of sentences session 3pptx.pptx
heathfieldcps1
 

Dernier (20)

On National Teacher Day, meet the 2024-25 Kenan Fellows
On National Teacher Day, meet the 2024-25 Kenan FellowsOn National Teacher Day, meet the 2024-25 Kenan Fellows
On National Teacher Day, meet the 2024-25 Kenan Fellows
 
Understanding Accommodations and Modifications
Understanding  Accommodations and ModificationsUnderstanding  Accommodations and Modifications
Understanding Accommodations and Modifications
 
Mehran University Newsletter Vol-X, Issue-I, 2024
Mehran University Newsletter Vol-X, Issue-I, 2024Mehran University Newsletter Vol-X, Issue-I, 2024
Mehran University Newsletter Vol-X, Issue-I, 2024
 
Beyond_Borders_Understanding_Anime_and_Manga_Fandom_A_Comprehensive_Audience_...
Beyond_Borders_Understanding_Anime_and_Manga_Fandom_A_Comprehensive_Audience_...Beyond_Borders_Understanding_Anime_and_Manga_Fandom_A_Comprehensive_Audience_...
Beyond_Borders_Understanding_Anime_and_Manga_Fandom_A_Comprehensive_Audience_...
 
How to Manage Global Discount in Odoo 17 POS
How to Manage Global Discount in Odoo 17 POSHow to Manage Global Discount in Odoo 17 POS
How to Manage Global Discount in Odoo 17 POS
 
21st_Century_Skills_Framework_Final_Presentation_2.pptx
21st_Century_Skills_Framework_Final_Presentation_2.pptx21st_Century_Skills_Framework_Final_Presentation_2.pptx
21st_Century_Skills_Framework_Final_Presentation_2.pptx
 
Sensory_Experience_and_Emotional_Resonance_in_Gabriel_Okaras_The_Piano_and_Th...
Sensory_Experience_and_Emotional_Resonance_in_Gabriel_Okaras_The_Piano_and_Th...Sensory_Experience_and_Emotional_Resonance_in_Gabriel_Okaras_The_Piano_and_Th...
Sensory_Experience_and_Emotional_Resonance_in_Gabriel_Okaras_The_Piano_and_Th...
 
This PowerPoint helps students to consider the concept of infinity.
This PowerPoint helps students to consider the concept of infinity.This PowerPoint helps students to consider the concept of infinity.
This PowerPoint helps students to consider the concept of infinity.
 
Unit 3 Emotional Intelligence and Spiritual Intelligence.pdf
Unit 3 Emotional Intelligence and Spiritual Intelligence.pdfUnit 3 Emotional Intelligence and Spiritual Intelligence.pdf
Unit 3 Emotional Intelligence and Spiritual Intelligence.pdf
 
Wellbeing inclusion and digital dystopias.pptx
Wellbeing inclusion and digital dystopias.pptxWellbeing inclusion and digital dystopias.pptx
Wellbeing inclusion and digital dystopias.pptx
 
Single or Multiple melodic lines structure
Single or Multiple melodic lines structureSingle or Multiple melodic lines structure
Single or Multiple melodic lines structure
 
OSCM Unit 2_Operations Processes & Systems
OSCM Unit 2_Operations Processes & SystemsOSCM Unit 2_Operations Processes & Systems
OSCM Unit 2_Operations Processes & Systems
 
Basic Intentional Injuries Health Education
Basic Intentional Injuries Health EducationBasic Intentional Injuries Health Education
Basic Intentional Injuries Health Education
 
Salient Features of India constitution especially power and functions
Salient Features of India constitution especially power and functionsSalient Features of India constitution especially power and functions
Salient Features of India constitution especially power and functions
 
Sociology 101 Demonstration of Learning Exhibit
Sociology 101 Demonstration of Learning ExhibitSociology 101 Demonstration of Learning Exhibit
Sociology 101 Demonstration of Learning Exhibit
 
How to setup Pycharm environment for Odoo 17.pptx
How to setup Pycharm environment for Odoo 17.pptxHow to setup Pycharm environment for Odoo 17.pptx
How to setup Pycharm environment for Odoo 17.pptx
 
Exploring_the_Narrative_Style_of_Amitav_Ghoshs_Gun_Island.pptx
Exploring_the_Narrative_Style_of_Amitav_Ghoshs_Gun_Island.pptxExploring_the_Narrative_Style_of_Amitav_Ghoshs_Gun_Island.pptx
Exploring_the_Narrative_Style_of_Amitav_Ghoshs_Gun_Island.pptx
 
ICT role in 21st century education and it's challenges.
ICT role in 21st century education and it's challenges.ICT role in 21st century education and it's challenges.
ICT role in 21st century education and it's challenges.
 
The basics of sentences session 3pptx.pptx
The basics of sentences session 3pptx.pptxThe basics of sentences session 3pptx.pptx
The basics of sentences session 3pptx.pptx
 
latest AZ-104 Exam Questions and Answers
latest AZ-104 Exam Questions and Answerslatest AZ-104 Exam Questions and Answers
latest AZ-104 Exam Questions and Answers
 

Intro Level Macroeconomics - Aggregate Expenditure Question Part 1 .pdf

  • 1. Intro Level Macroeconomics - Aggregate Expenditure Question Part 1: AE Problem (11 questions worth 3 points each for a total of 33 points). Suppose the initial conditions of the economy are characterized by the following equations in black font. We then shock the economy as shown in the red font. Where: a0 = 50, a1 = .60, a2 = .05, a3 = .10, a4 = .5, a5 = -400, b0 = 100, b1 = .5, b2 = .2, b3 = -50 Use the initial conditions above to get expressions for the Consumption function, Investment and the AE equation. Fill in the intercept and slope values to correctly complete the consumption function: AE = 2. What is the value of Investment: I = 3. Fill in the intercept and slope values to correctly complete the AE equation: AE = 4. The value of equilibrium output (Y) = 5. The value of equilibrium consumption (C) = Solution Aggregate expenditure is equal to the sum of consumption, investment, government expenditures and exports minus imports. AE = C+I+G+(X-M) AE = 50+0.6(Y-200)+0.5(10000)+0.1(15000)+0.5(120)-400(4) +100+0.5(140)+0.2(1500)-50(4) + 200-400 AE = 4960+0.6Y 1) C= 4890+0.6Y 2) Investment=100+0.5(140)+0.2(1500)-50(4) Investment = 270 3) AE = 4960+0.6Y 4) Y=4960+0.6Y 0.4Y=4960 Y=12400 5) C= 4890+0.6Y C=12330