Suppose the aggregate output of the Danish economy is characterized as follows.
Consumption: C = 100 + 0.5(Y-T)
Investment: I = 300
Government: G = 200
Taxes: T = 200
Assume that Denmark is a closed economy, with no net exports.
Given the information, the marginal propensity to consume (mpc) in Denmark is 0.5 .
Answer Key: 0.5
Problem Set
- Suppose that the Danish Parliament passes a large tax increase and taxes now equals 400. The aggregate output of the Danish economy is characterized as follows. Consumption: C = 100 + 0.5(Y-T) Investment: I = 300 Government: G = 200 Taxes: T = 400 The tax multiplier for the Danish economy is -1 .
- Suppose that the Danish Parliament passes a large tax increase and taxes now equals 400. The aggregate output of the Danish economy is characterized as follows. Consumption: C = 100 + 0.5(Y-T) Investment: I = 300 Government: G = 200 Taxes: T = 400 The new level of equilibrium output (Y) in Denmark is 800 .
- Suppose the aggregate output of the Danish economy is characterized as follows. Consumption: C = 100 + 0.5(Y-T) Investment: I = 300 Government: G = 200 Taxes: T = 200 Assume that Denmark is a closed economy, with no net exports. Given the information, national savings in Denmark is 300 .
- Suppose the aggregate output of the Danish economy is characterized as follows. Consumption: C = 100 + 0.5(Y-T) Investment: I = 300 Government: G = 200 Taxes: T = 200 Assume that Denmark is a closed economy, with no net exports. Given the information, the equilibrium level of consumption (C) in Denmark is 500 .
- Suppose the aggregate output of the Danish economy is characterized as follows. Consumption: C = 100 + 0.5(Y-T) Investment: I = 300 Government: G = 200 Taxes: T = 200 Assume that Denmark is a closed economy, with no net exports. Given the information, the equilibrium level of output in Denmark is 1000 .
- Consider a basket of goods that costs $72.00 in the United States. The same basket of goods costs 224.00 pesos in Mexico. The nominal exchange rate is 14 pesos per dollar. Given the information above, the real exchange rate is 4.50 baskets of Mexican goods per basket of U.S. goods. Suppose that the nominal exchange rate increases from 14.00 pesos per dollar to 28.00 pesos per dollar. If the prices of the basket remain unchanged in both the U.S. and Mexico, the real exchange rate between the U.S. and Mexican baskets of goods will change to 9.00 baskets of Mexican goods per basket of U.S. goods.
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- Suppose the following transactions occur during 2012. 1. Sung, a liquor store owner in the United States, buys 50 bottles of champagne from a French vineyard at a price of $75 per bottle. 2. Autozone, a U.S. company, sells 100 spark plugs to a Korean car company at $5 per spark plug. 3. Tim, a U.S. citizen, pays $670 for a surfboard he orders from Greatwaves (a U.S. company). Based on these transactions, U.S. exports (EX) in 2012 is $ 500 .
- Suppose the following transactions occur during 2012. 1. Sung, a liquor store owner in the United States, buys 50 bottles of champagne from a French vineyard at a price of $75 per bottle. 2. Autozone, a U.S. company, sells 100 spark plugs to a Korean car company at $5 per spark plug. 3. Tim, a U.S. citizen, pays $670 for a surfboard he orders from Greatwaves (a U.S. company). Based on these transactions, U.S. imports (IM) for 2012 is $ 3750 .
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- Consider a simple economy that produces only loaves of bread. The table contains information on the economy's output, money supply, velocity, and price level. For example, in 2009, the money supply was $200, the price of a loaf of bread was $5, and the economy produced 400 loaves of bread. Use the information in the table and your previous answers. The money supply grew at a rate of 8.0 % from 2009 to 2010 and the inflation rate (percentage change in prices) grew at a rate of 8.0 % from 2009 to 2010.
- Consider a simple economy that produces only loaves of bread. The table contains information on the economy's output, money supply, velocity, and price level. For example, in 2009, the money supply was $200, the price of a loaf of bread was $5, and the economy produced 400 loaves of bread. Using the information in the table, the nominal GDP in 2009 was $ 2000 , whereas in 2010, nominal GDP was $ 2160 .
- Consider a simple economy that produces only loaves of bread. The table contains information on the economy's output, money supply, velocity, and price level. For example, in 2009, the money supply was $200, the price of a loaf of bread was $5, and the economy produced 400 loaves of bread. Using the information in the table, the price level in 2010 was $ 5.40 .
- Consider a simple economy that produces only loaves of bread. The table contains information on the economy's output, money supply, velocity, and price level. For example, in 2009, the money supply was $200, the price of a loaf of bread was $5, and the economy produced 400 loaves of bread. Using the information in the table, the velocity of money in 2009 was 10 .
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