Assignment on the Impact of Saudi-Russian oil war on Saudi Economy.

Guidelines of Impact of Saudi-Russian oil war on Saudi Economy:

1.      Must do the assignments independently by every student.

2.      Each assignment must not exceed 350 word count.

3.      The assignment must be justified and use only TIMES NEW ROMAN, font 12. Space in between the lines must be 1.5.

4.      Must provide the sources of data collection (links of websites). (Collect information from 4-6 sources).

5.      Please do not copy and paste the information. Summarize the collected information.

6.      The range of marks to be awarded is based on the quality of submitted assignments.

Assignments from the course:
ASSIGNMENT # 3
 
1.      For the table shown, answer the following questions:

a.      For each level of actual aggregate expenditure, calculate unplanned inventory investment.

Under our calculations unplanned inventory investment is around -$100, -$50, $0, $50, and $100 for the actual aggregate expenditure or output (Y) of $500, $600, $700, $800, and $900 respectively .

b.      What is the equilibrium level of aggregate expenditure in this economy? How do you know?

The equilibrium level is at $700 actual aggregate expenditure. The “0” indicate this answer.

c.       Suppose that planned investment increases by $50 billion. What is the new equilibrium level of aggregate expenditure in this economy?

The equilibrium level will change towards declining position.

d.      What is the marginal propensity to consume in this economy?

The increasing personal consumer spending cause to change the quantities of consumption as in this case it is increased from 300 to 500 (Pettinger, 2017).

e.       What is the expenditure multiplier in this economy?

The change in the autonomous expenditure because of changes in production represents expenditure multiplier for this economy.

2.      For the figure shown, answer the following questions:

a.       What is the expenditure multiplier in this economy?

The expenditure multiplier in this economy is presented by “PAE=Y”

b.      What is the marginal propensity to consume in this economy?

The marginal propensity to consume in this economy is presented at $440 (planned aggregate expenditure.

3.      For the table shown, answer the following questions:

a.   What is the marginal propensity to consume for households in this economy?

The marginal propensity to consume represents the consumption metric of consumers in a targeted economy. Increase in disposable income is mainly caused by an increase in consumer spending in an economy. In this economy, marginal propensity can be identified by considering the consumption of consumers at $300, $350, $400, $450, and $500 (an increasing trend).

b.   Based on the assumptions of our aggregate expenditure model, fill in the columns for planned investment, government spending, and net exports. What is this type of expenditure called?

The planned investment, government spending, and net exports are an example of aggregate expenditure in an economy that is also known as national aggregated expenditures (Falkinger, 2012).

c.    For each level of actual aggregate expenditure, calculate unplanned inventory investment.

The calculated unplanned inventory investment for the Middle East is around $650, $700, $750, $800, and $850 for the actual aggregate expenditure or output of $500, $600, $700, $800, and $900 respectively.

d.   What is the equilibrium level of aggregate expenditure in this economy? How do you know?

The equilibrium level of aggregate expenditure is at $800 actual aggregate expenditure.

e.    For each level of actual aggregate expenditure, label the future output tendency as “increase,” “decrease,” or “same” based on what you expect to happen to future output. What relationship does this categorization have to your answer in part d?

The actual expenditure is expected to increase for each level even when it meets the equilibrium point (stated in question d).

ASSIGNMENT #4
1)      Refer to columns 1 and 6 in the table. Incorporate government into the table by assuming that it plans to tax and spend $20 billion at each possible level of GDP. Also, assume that the tax is a personal tax and that government spending does not induce a shift in the private aggregate expenditures schedule. What is the change in equilibrium GDP caused by the addition of government?

Following the above tables, the new equilibrium point is at $400 after change equilibrium GDP.

2)      Assume that (a) the price level is flexible upward but not downward and (b) the economy is currently operating at its full-employment output. Other things equal, how will each of the following affect the equilibrium price level and the equilibrium level of real output in the short run?

a.      An increase in aggregate demand.

This will increase demand and cause to increase prices by changing the equilibrium position.

b.      A decrease in aggregate supply, with no change in aggregate demand.

Unemployment will increase with a decrease in aggregated supply and output will decrease.

c.       Equal increases in aggregate demand and aggregate supply.

The real output level will remain unchanged because of equal pressure from both demand and supply side (Khanacademy.org, 2020).

d.      A decrease in aggregate demand.

The demand will turn into deficit and unemployment will increase. Such a situation will decrease prices for equilibrium.

e. An increase in aggregate demand that exceeds an increase in aggregate supply.

Increase in aggregated supply will reduce prices and under-employment status in the economy. Income and output level will also go towards decline.  However, in case of change level was greater for demand than supply then demand will exceed and prices will go towards incline (Xplaind.com, 2020).

3)      Answer the following questions based on the three sets of data for the country of North Vaudeville:

a.      Which set of data illustrates aggregate supply in the immediate short-run in North Vaudeville? The short-run? The long run?

Following the above table, data set B represent immediate short-run.  However, short-run is projected by data set A. the overall data set C is an example of the long run in the country of North Vaudeville as it represents that country will need more time to adjust real GDP and price level.

b.      Assuming no change in hours of work, if real output per hour of work increases by 10 per cent, what will be the new levels of real GDP in the right column of A? Does the new data reflect an increase in aggregate supply or does it indicate a decrease in aggregate supply?

The overall price level will change in column A. See the following calculations for change in the price level.

Using the above formula all calculations are made for new price levels. The following table presents the new price level.

References of Impact of Saudi-Russian oil war on Saudi Economy

Falkinger, J. (2012). A Theory of Employment in Firms: Macroeconomic Equilibrium and Internal Organization of Work. Springer Science & Business Media.

Khanacademy.org. (2020). The expenditure-output, or Keynesian cross, model. Retrieved from www.khanacademy.org: https://www.khanacademy.org/economics-finance-domain/macroeconomics/income-and-expenditure-topic/macroeconomics-the-keynesian-cross/a/the-expenditure-output-or-keynesian-cross-model-cnx

Pettinger, T. (2017). Marginal propensity to consume (MPC). Retrieved from www.economicshelp.org: https://www.economicshelp.org/university/marginal-propensity-to-consume/

Xplaind.com. (2020). Marginal Propensity to Consume. Retrieved from Xplaind.com: https://xplaind.com/846554/marginal-propensity-to-consume