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 .
Answer Key: 800
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 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 .
- 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 .
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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 .
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