Income (Y)
Net Tax (T)
Disposable Income (YD)
Consumption (C)
Saving (S)
Investment (I)
Gov. Spending (G)
Total Expenditure (TE)
10,000
1,000
1,300
2,000
1,500
12,000
1,000
1,700
2,000
1,500
13,000
1,000
2,000
1,500
15,000
1,000
2,000
1,500
16,000
1,000
2,000
1,500
18,000
1,000
2,000
1,500
20,000
1,000
2,000
1,500
a) Fill in the missing values.
b) What is the equilibrium output level?
c) If the current output level is 15,000, what would likely happen to the output level next year? Why?
d) By how much will the equilibrium output level increase (decrease) if the planned investment falls by 500?
e) By how much will the equilibrium output level increase (decrease)if the tax (T) decreases by 400?
f) By how much will the equilibrium output level increase (decrease) if the government spending (G) decreases by 800?
g) By how much will the equilibrium output level increase (decrease) if the government spending (G) decreases by 300 and at the same time, the government cuts taxes by the same amount of 300?
Income (Y) |
Net Tax (T) |
Disposable Income (YD) |
Consumption (C) |
Saving (S) |
Investment (I) |
Gov. Spending (G) |
Total Expenditure (TE) |
10,000 |
1,000 |
1,300 |
2,000 |
1,500 |
|||
12,000 |
1,000 |
1,700 |
2,000 |
1,500 |
|||
13,000 |
1,000 |
2,000 |
1,500 |
||||
15,000 |
1,000 |
2,000 |
1,500 |
||||
16,000 |
1,000 |
2,000 |
1,500 |
||||
18,000 |
1,000 |
2,000 |
1,500 |
||||
20,000 |
1,000 |
2,000 |
1,500 |
a) Fill in the missing values.
b) What is the equilibrium output level?
c) If the current output level is 15,000, what would likely happen to the output level next year? Why?
d) By how much will the equilibrium output level increase (decrease) if the planned investment falls by 500?
e) By how much will the equilibrium output level increase (decrease)if the tax (T) decreases by 400?
f) By how much will the equilibrium output level increase (decrease) if the government spending (G) decreases by 800?
g) By how much will the equilibrium output level increase (decrease) if the government spending (G) decreases by 300 and at the same time, the government cuts taxes by the same amount of 300?