level of autonomous consumption in the economy

Related BrainMass Solutions

• Spending by Individuals, Firms, and Governments

  b.If there is an increase in autonomous import expenditure from 100 to 200 resulting from an increase in the currency exchange rate, calculate the new equilibrium level of income and the value of the multiplier.

• multiplier model

  Changes in autonomous expenditures shift the AE curve itself. The vertical intercept equals the sum of autonomous expenditures. The AE curve shifts up due to an increase in autonomous consumption.

• Hypothetical Economy with Fixed Price Level and Interest Rates

  i) What is the equilibrium level of income (real GDP) in this economy?

• Australian investment - Fixed Exchange Rate System

  The Australian economy will contract as aggregate demand falls (more savings means less consumption), but it will run a trade surplus, because the supply excess caused by the fall in consumption (rise in savings) will be sold abroad (i.e., exported)

• Macroecomics Questions

  a closed economy, the consumption function is : C = 1.15 + .75 ( Y - T).

• IS-LM Curve Described and Graphed

  The solution not only explains the effect of autonomous increase in savings that is matched by a drop in consumption but also draws a graph for it (in the attachment).

• increase in consumption

  59070 increase in autonomous consumption If autonomous consumption rises by $0.8 trillion and the marginal propensity to consume (MPC) equals 3/4, the equilibrium level of output demanded will rise by a. $0.2 trillion b. $0.6 trillion c. $1.07 trillion

• The change in equilibrium output

  Compute the equilibrium level of income, the size of the multiplier, and the change in equilibrium income for an increase in autonomous consumption of $50 million.

• Automatic Stabilizers

  To see why, think of what happens when the economy goes into a recession, perhaps because of a sudden drop in autonomous consumption.