1. Refer to the figure above cp. stands for ceteris paribus, all other things be

Question

1. Refer to the figure above cp. stands for ceteris paribus, all other things being equal ? the only thing that changes is the variable that is explicitly stated. a) Based on the figure, how much is autonomous spending? b) Based on the figure, when PAE = 1000 + .75Y, how much is short -run equilibrium output? c) According to the figure, would the equilibrium output level represent a full- employment equilibrium, recessionary gap or an inflationary gap? d) Based on the figure, the how much is the income -expenditure multiplier want an actual number)? e) Based on the figure, the how much is the full -employment output (I want an actual number)? f) Based on the figure, if output (Y) is 5000, how much would PAE be? a) Based on the figure, if the government acted to move the economy from its equilibrium to full -employment Y^* c.p., what type of act on would they pursue (expansionary or contractionary)? b) Based on the figure in the spending multiplier, how much would government purchase need to change to achieve a full -employment equilibrium (Y^*)? C) Based on the figure, how much would tax change to achieve a full -employment equilibrium (r)? d) Why is amount of tax change different from the amount of change in government purchases in achieving Y^*?

Explanation / Answer

1. Refer to the figure above cp. stands for ceteris paribus, all other things be

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