Macroeconomics Homework

Suppose the economy is in equilibrium, and assume no government or foreign sector.  If total saving equals 2980, then intended investment must equal...

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Suppose a closed economy with no government spending or taxing is capable of producing an output of $3,000 at full employment.  Suppose also that autonomous consumption is $400, intended investment is $200, and on average households will save 25 cents of every additional dollar of income they receive.  Calculate the following (express your answers as whole numbers without decimals, commas, dollar signs, or anything else).

Multiplier:

Value of output (Y) in equilibrium:

Total consumption in equilibrium

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Suppose a closed economy with no government spending or taxing is capable of producing an output of $1250 at full employment.  Suppose also that autonomous consumption is $190, intended investment is $120, and the mpc is 0.75.  

What is the multiplier for this economy?

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Suppose a closed economy with no government spending or taxing is capable of producing an output of $1400 at full employment.  Suppose also that autonomous consumption is $200, intended investment is $110, and the mpc is 0.50.  

What is the value of output (Y) in equilibrium?

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Suppose a closed economy with no government spending or taxing is capable of producing an output of $2000 at full employment.  Suppose also that autonomous consumption is $70, intended investment is $90, and the mpc is 0.50.  

How much additional autonomous spending is needed to move the economy to full employment (that is, what is the recessionary gap)?

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In the above Keynesian cross diagram, the curve labeled AD represents aggregate demand.  Suppose the marginal propensity to consume for this economy is 0.75 and the economy would be fully employed with output and income (Y) equal to 2000.  How much additional investment would be needed to move the economy from its current equilibrium to full employment?

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According to the lectures, which of the following ideas are representative of (neo)classical theory, which are representative of (post)Keynesian theory, and which are shared by both theories?

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