Purplepeopleeater Posted October 21, 2015 Report Share Posted October 21, 2015 Any experts? Taking econ202 and I have no clue on how to answer this. It's an online class and haven't heard back from the instructor. 1 Quote Link to comment Share on other sites More sharing options...
generalripphook Posted October 21, 2015 Report Share Posted October 21, 2015 Looks like they want you to use the given GDP (Y) values combined with the formula they have given to find consumption (C=200+.5y) For finding the aggregate expenditure it looks like they want you to use the model that Aggregate expenditures = consumption spending +government spending+investment spending+ net exports MPC is the marginal propensity to consume which is for every dollar gained how much of it will a consumer spend? For the multiplier its going to be 1/(1-MPC) or 1/MPS I think the equilibrium will be evident when you have filled out the rest of the table. Quote Link to comment Share on other sites More sharing options...
pretre Posted October 21, 2015 Report Share Posted October 21, 2015 It's not too hard. Okay, so consumption is determined by C=200+.5Y Column 1 = Y so Column 2= 200 +.5(Column 1) Fill that in. Column 3 is Aggregate expenditures which would be Consumption + Gross Investment + Government Spending + Net Exports ELoO is when Aggregate Expenditures equals total income (Y) (So when Column 1 equals Column 3) MPC is Delta Consumption divided by Delta Income Multiplier is 1/(1-MPC) Quote Link to comment Share on other sites More sharing options...
pretre Posted October 21, 2015 Report Share Posted October 21, 2015 Gah, ninja'd. 1 Quote Link to comment Share on other sites More sharing options...
Purplepeopleeater Posted October 21, 2015 Author Report Share Posted October 21, 2015 It's not too hard. Okay, so consumption is determined by C=200+.5Y Column 1 = Y so Column 2= 200 +.5(Column 1) Fill that in. Column 3 is Aggregate expenditures which would be Consumption + Gross Investment + Government Spending + Net Exports ELoO is when Aggregate Expenditures equals total income (Y) (So when Column 1 equals Column 3) MPC is Delta Consumption divided by Delta Income Multiplier is 1/(1-MPC) This is what the web learning didn't explain that well. Thank you! Quote Link to comment Share on other sites More sharing options...
Purplepeopleeater Posted October 21, 2015 Author Report Share Posted October 21, 2015 To verify, when Y = 0, consumption is 200. When Y = 200, consumption would be (Y= 200 + .5*200) or 300. Quote Link to comment Share on other sites More sharing options...
pretre Posted October 21, 2015 Report Share Posted October 21, 2015 Right. I ended up just making a quick excel to prove my assumptions right. Iirc the sweet spot is: 2200 Quote Link to comment Share on other sites More sharing options...
rudra34 Posted October 22, 2015 Report Share Posted October 22, 2015 I saw so disappointed to see that this thread was indeed about macroeconomics. 4 Quote Link to comment Share on other sites More sharing options...
ROGRE Posted October 23, 2015 Report Share Posted October 23, 2015 This talk make cave man head-thing hurt. 1 Quote Link to comment Share on other sites More sharing options...
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