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    Macro Economics Worksheet On Aggregate Demand in The Closed Economy

    Uploaded by

    Yisak wolasa
    This document contains 8 problems related to macroeconomic concepts like aggregate demand, consumption functions, investment functions, money supply and demand, and equilibrium. Specifically: 1. It asks to calculate aggregate propensity to save and marginal propensity to consume given consumption levels and income changes. 2. It provides a consumption function and asks to find the slope of the savings function, equilibrium income, the multiplier, and how equilibrium income changes with changes in government spending. 3. It gives an autonomous investment level and consumption function and asks to calculate equilibrium income, the multiplier, and how income changes with an investment increase. 4. It provides money demand and supply functions and asks about the equilibrium interest rate graphically and with

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    Macro Economics Worksheet On Aggregate Demand in The Closed Economy

    Uploaded by

    Yisak wolasa
    209 views2 pages
    This document contains 8 problems related to macroeconomic concepts like aggregate demand, consumption functions, investment functions, money supply and demand, and equilibrium. Specifically: 1. It asks to calculate aggregate propensity to save and marginal propensity to consume given consumption levels and income changes. 2. It provides a consumption function and asks to find the slope of the savings function, equilibrium income, the multiplier, and how equilibrium income changes with changes in government spending. 3. It gives an autonomous investment level and consumption function and asks to calculate equilibrium income, the multiplier, and how income changes with an investment increase. 4. It provides money demand and supply functions and asks about the equilibrium interest rate graphically and with

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    This document contains 8 problems related to macroeconomic concepts like aggregate demand, consumption functions, investment functions, money supply and demand, and equilibrium. Specifically: 1. It asks to calculate aggregate propensity to save and marginal propensity to consume given consumption levels and income changes. 2. It provides a consumption function and asks to find the slope of the savings function, equilibrium income, the multiplier, and how equilibrium income changes with changes in government spending. 3. It gives an autonomous investment level and consumption function and asks to calculate equilibrium income, the multiplier, and how income changes with an investment increase. 4. It provides money demand and supply functions and asks about the equilibrium interest rate graphically and with

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    209 views2 pages

    Macro Economics Worksheet On Aggregate Demand in The Closed Economy

    Uploaded by

    Yisak wolasa
    This document contains 8 problems related to macroeconomic concepts like aggregate demand, consumption functions, investment functions, money supply and demand, and equilibrium. Specifically: 1. It asks to calculate aggregate propensity to save and marginal propensity to consume given consumption levels and income changes. 2. It provides a consumption function and asks to find the slope of the savings function, equilibrium income, the multiplier, and how equilibrium income changes with changes in government spending. 3. It gives an autonomous investment level and consumption function and asks to calculate equilibrium income, the multiplier, and how income changes with an investment increase. 4. It provides money demand and supply functions and asks about the equilibrium interest rate graphically and with

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    Macro Economics Worksheet on Aggregate Demand in the closed economy

    1. When income of an economy is $1,000.00 consumption is $750.00 then APS is :


    2. When income of an economy is $20,000, consumption is $20,000 and consumption rises
    to $24,000 when income increases to $25,000, then MPC and MPS is :
    3. Consider the consumption function is represented by C=200+0.8Yd. What is the value of
    the slop of saving function?
    4. Consider the following information about a closed economy:
    C = 100 + 0.80Y

    I = 200, is exogenous

    G = 100, is exogenous

    Where, Y is national income & all variables are in million US dollars

    A. Find out the equilibrium level of income.


    B. Compute the slope of consumption function
    C. Determine the level of multiplier.
    D. Find the amount of national saving.
    E. Find the amount Consumption.
    F. Suppose G increases to 125, what is the new equilibrium level of income?
    5. Suppose the level of autonomous investment in an economy is 500 and the consumption function
    is given as C= 50+0.6Yd Then
    A. Calculate the national equilibrium income(Y).
    B. What is the size of the multiplier?
    C. What will be the national income if investment increases by 50?
    6. Suppose that the money demand function is (M/P)d = 4,000 − 100r, where r is the interest
    rate in percent. The money supply M is 6,000 and the price level P is 2.

    A. Graph the supply and demand for real money balances.


    B. What is the equilibrium interest rate? (1 point)
    C. Assume that the price level is fixed. What happens to the equilibrium interest rate if
    the supply of money is raised from 6,000 to 8,000?
    D. If the National Bank of Ethiopia wishes to raise the interest rate to 15 percent, what
    money supply should it set?

    Compiled by: Melese Fikre Page 1


    7. Assume the economy has the following information.
    C = 102 +0.7Y…Consumption function
    I = 150-100r……Investment function
    Ms = 300………..Money supply
    Mt= 0.25Y……...Money for transaction and precautionary purpose
    Msp=124-200r…..Money for speculative purpose
    A. Calculate the equilibrium value of Income (Y).
    B. Calculate the equilibrium value of Interest (r).
    C. Compute the value of investment.
    D. Compute the value of Money for speculative purpose (Msp).
    8. Suppose the following functions are given
    C= 100+0.8Y Money demand(Md)=0.2Y-5i
    S= -100+0.2Y Money supply(Ms)=150
    I= 120-5i
    Find
    A. The IS-equation.
    B. The LM-equation.
    C. The income in the general equilibrium.
    D. The interest rate in the general equilibrium.

    Compiled by: Melese Fikre Page 2

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