# Macroeconomics

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Macroeconomics
Name of the student
Name of the university
Course ID
1MACROECONOMICS
References list................................................................................................................................13
2MACROECONOMICS
Gross Domestic Product=Consumption+ Investment +Government expenditure+ Net export =Consumption+ Inve
From Australian Bureau of Statistics, information on the following four components are obtained
as
Consumption expenditure: \$260752 million
Investment expenditure: \$109478 million
Changes in inventory = \$1983 million
Government expenditure: \$84696 million (abs.gov.au 2018)
Export: \$100820 million
Import: \$99614 million
ActualGDP=\$ 260752+ \$ 1094 78+ \$ 1983+ \$ 84696+ ( \$ 100820\$ 99614 )
¿ \$ 260752+ \$ 109478+ \$ 1983+ \$ 84696+ \$ 1206
¿ \$ 458115 millon
Consumption(C )=a+ b Y d
a: autonomous consumption
b: marginal propensity to consume (MPC).
Given MPS = 0.3, marginal rate of tax is 0.05 and nx(m) is 0.04, the MPC can be compute as
3MACROECONOMICS
MPC=1 ( MPS + MRT + MPM )
¿ 1 ( 0.3+ 0.05+0.04 )
¿ 10.39
¿ 0.61
Yd : Disposable income is income left after payment of tax. Given marginal tax rate 0.05, the
expression for disposable income is given as
Y d =Y 0.05Y T
¿ 0.95 Y 70140.1
C=a+ 0.61(0.95 Y 70140.1)
¿ , 260656=a+0.61 ( 0.95 ×46082770140.1 )
¿ , 260656=a+0.61 ( 437785.770140.1 )
¿ , 260656=a+0.61 ×367645.6
¿ , 260656=a+224263.8
¿ , a=260656224263.8
¿ , a=36392.2
Therefore, the computed value of autonomous consumption is 36392.2 million dollar

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