İKTİSADA GİRİŞ II

Economic agents obtain the goods and services they demand by paying the cost, that is, by spending. If we rewrite our aggregate expenditure function for an open economy, we get: AE = C + I + G + NX

According to equation above, aggregate expenditures (AE) are the sum of consumption expenditures (C), investment expenditures (I), government expenditures (G) and net exports (NX). The aggregate expenditure function shows us the level of spending at each income level.

In an economy, there is no rule that investments are equal to savings, government expenditures are equal to taxes, and exports are equal to imports. In order for the equilibrium to be realized, the sum of the injections must be equal to the sum of the leakages. Accordingly, the equilibrium condition for an economy can be expressed as the sum of savings (S), taxes (T), and import (IM) should be equal to the sum of investments (I), government expenditures (G), and exports (EX) S + T + IM = I + G + EX

Leakages = (S+T+IM), Leakages are the factors that cause autonomous components of aggregate expenditures to reduce.

Injections = (I+G+EX), Injections are additions to income – expenditure flow

Leakages = (S+T+IM), Leakages are the factors that cause autonomous components of aggregate expenditures to reduce.

Injections = (I+G+EX), Injections are additions to income – expenditure flow

When the households decide to increase their savings without a change in income level, interesting contradiction called as saving paradox will arise.

households planning to save more and consume less now, but save the same amount. This is a paradox indicating that increasing saving reduces consumption and, therefore, income; however, at this new income level savings are at the same level. When you consider the fact that savings are used to finance investments in the country, this result contradicts the widespread belief that savings are beneficial for the economy.

Change in GDP = (1/(MPS + MPI)) x Change in G

MPS = 1 - MPC

Multiplier = 1/total leakages 

Multiplier = 1/(MPS + MPI)

Change in GDP = (1/(MPS + MPI)) x Change in G

MPS = 1 - MPC

Multiplier = 1/total leakages 

Multiplier = 1/(MPS + MPI)

Full employment level of income is the level of income that will be attained in the economy if all the factors of production participate most effectively into the production. This level of income is called potential GDP.

Multiplier is 1/(1-MPC+MPI) given the aggregate expenditure function in the question. 

MPC=0.65, MPI=0.15

multiplier=1/(1-0.65+0.15)=2

Multiplier is 1/(1-MPC-MPI) given the aggregate expenditure function in the question. 

MPC=0.83, MPI=0.33

multiplier=1/(1-0.83+0.33)=2

5.00

The relationship between autonomous expenditures and income is

where 1/(1-MPC-MPI)=1/(MPS-MPI) is  the multiplier.

Y=42.5,  A₀=17 and MPI=0.25

42.5=1/(1-MPC-0.25)*17 

MPC=0.85

In the equilibrium approach of the Classical model, thanks to the smooth operation of the market mechanism, the economy is in constant balance, that is, at full employment. The classical model explains the continuous realization of employment in the economy, based on Say’s Law. According to Classical economists, interest rate is the key variable to provide this equality. This interest rate, which is determined on the loanable funds market, will change so as to ensure that the funds provided as a result of savings are equal to the funds requested for investments. Cevap A şıkkıdır.

40.8/24=1.7

There are three types of injections for income- expenditure model developed so far: investments, government expenditures, and exports for an open economy.

1/(0.197541+0.111111)=3.24

In the equilibrium planned and realized aggregates in total must be the same.