Change in AD = Change in Government spending / (1 - MPC)
Change in AD = 5 billion / (1 - 0.75) = 5 billion / 0.25 = 20 billion
D) It increases by $ 20 billion.
If the multiplier is 4 and real GDP increases by S520 billion, the increase in investment spending must have been a. $110 billion. O b. $120 billion. O c. $140 billion d. $130 billion.
6. Suppose an economy currently earns $6,000 billion and spend $4.680 billion. If their income increases to $6,500 billion, they will spend $4,980 billion. (5 pts.de a. Calculate the average propensity to consume when the income is $6,000 billion. Į I I Į Į Į b. Calculate the average propensity to save when the income is $6.000 billion. Į Į Į Į Į ł c. Calculate the marginal propensity to consume when income increases from $6,000 billion to $6,500 billion....
o O Assume that consumption in the United States is $9.000 billion in 2009. If the MPC is 0.8 and disposable income increases by 51,000 billion in 2010, then the level of consumption in 2010 will be 7,200 billion b. 89,800 billion O 510,000 billion O d. 59,000 Million D
o Heck reaction RCH CH2 CI Pd Fill in mechanism below:
o Heck reaction RCH CH2 CI Pd Fill in mechanism below:
QUESTION 21 Suppose investment spending initially increases by $50 billion in an economy whose MPC is 2/3. By how much will this ultimately change real GDP? O A $75 billion OB. $50 billion OC $ 150 billion D. $ 200 billion QUESTION 22 Which of the following statements is FALSE? O A When income increases MPS is constant When income increases APS Increases C. When income increases MPC is increases D. When income increases APC decreases QUESTION 23 If the...
If disposable income increases from $912 billion to $1092 billion and Savings increased by $192, then the consumption will increase by ____________ (A: $0 billion; B: $6 billion; C: $9 billion; D: $12 billion).
If real investment increases by $500 billion, the C + / + G + X curve will O A. shift up vertically by less than $500 billion. OB. not shift. O c. shift up vertically by $500 billion. OD. shift up vertically by more than $500 billion.
O A reduce first round" consumption by $160 billion: reduce AD by $640 billion O B reduce c O C reduce consumption by $40 billion, reduce AD by $160 billion by $120 billion; reduce AD by $480 billion reduce AD by $160 billion
If the marginal propensity to consume (MPC) is 2/3 and investment spending increases by $2 billion, the level of real output (GDP) will: increase by $10 billion. O increase by $3 billion. increase by $6 billion. O Increase by $8 billion
Suppose an economy is initially in equilibrium at $600 billion and investment increases by $20 billion. This causes the economy to expand to $800 billion. Calculate the value of the multiplier.