Questions from General Economics

Q: Using the utility-maximization rule as your point of reference,

Using the utility-maximization rule as your point of reference, explain the income and substitution effects of an increase in the price of product B, with no change in the price of product A.

Q: Assuming the level of investment is $16 billion and independent of

Assuming the level of investment is $16 billion and independent of the level of total output, complete the accompanying table and determine the equilibrium levels of output and employment in this priv...

Q: Suppose that the annual rates of growth of real GDP of Econoland

Suppose that the annual rates of growth of real GDP of Econoland over a five-year period were sequentially as follows: 3 percent, 1 percent, -2 percent, 4 percent, and 5 percent. What was the average...

Q: Using the consumption and saving data in problem 1 and assuming investment

Using the consumption and saving data in problem 1 and assuming investment is $16 billion, what are saving and planned investment at the $380 billion level of domestic output? What are saving and actu...

Q: By how much will GDP change if firms increase their investment by

By how much will GDP change if firms increase their investment by $8 billion and the MPC is .80? If the MPC is .67?

Q: Suppose that a certain country has an MPC of .9 and

Suppose that a certain country has an MPC of .9 and a real GDP of $400 billion. If its investment spending decreases by $4 billion, what will be its new level of real GDP?

Q: The data in columns 1 and 2 in the accompanying table are

The data in columns 1 and 2 in the accompanying table are for a private closed economy: a. Use columns 1 and 2 to determine the equilibrium GDP for this hypothetical economy. b. Now open up this eco...

Q: Assume that, without taxes, the consumption schedule of an economy

Assume that, without taxes, the consumption schedule of an economy is as follows: a. Graph this consumption schedule and determine the MPC. b. Assume now that a lump-sum tax is imposed such that the...

Q: Refer to columns 1 and 6 in the table for problem 5

Refer to columns 1 and 6 in the table for problem 5. Incorporate government into the table by assuming that it plans to tax and spend $20 billion at each possible level of GDP. Also assume that the ta...

Q: Assume that the consumption schedule for a private open economy is such

Assume that the consumption schedule for a private open economy is such that consumption C = 50 + 0.8Y. Assume further that planned investment Ig and net exports Xn are independent of the level of rea...