Homework Answers
Ans9) the correct option is a) Consumption increases and saving increases.
Ans10) the correct option is b) Consumption increases and saving decreases.
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D) 400 9) When you get an increase in current income, what is likely to happen...
9. What is the impact of costly investment on consumption in the long run? (a) It...
9. What is the impact of costly investment on consumption in the long run? (a) It decreases consumption. (b) It increases consumption. (c) It may decrease or increase consumption. (d) It has no impact on consumption. 10. What is the impact of costly investment on external wealth in the long run? (a) It decreases external wealth. (b) It increases external wealth. (c) It may decrease or increase external wealth. (d) It has no impact on external wealth.
A,B,C,D Given this information, answer the following questions: A) How much will consumption increase if disposable...
A,B,C,D
Given this information, answer the following questions: A) How much will consumption increase if disposable income increases by $400? Show your work. B) Suppose there is a decrease in investment of S1,200. What will be the total decrease in Real GDP caused by this decrease in investment? Show your work. C) If autonomous consumption is S100, write the consumption function of this economy. D) If the economy's savings rate decreases, how will this most likely affect the MPC (increase,...
Did I answer these questions correctly? 20. What is likely to happen to the Demand for...
Did I answer these questions correctly?
20. What is likely to happen to the Demand for irrigation water when corm prices rise significantly due to an ethanol boom? (don 't calculate numbers, just state whether aggregate demand increases or decreases) a Demand increases (shifts up) price rises, quantities sold increase b. Demand decreases (shifts down) price falls, quantities sold decrease c. Supply increases (shifts down) price falls, quantities sold increase d. Supply decreases (shifts up) price rises, quantities sold decrease...
Practice Questions (Chapter 8 (Note: In order to provide some incentives, your scores will be recorded...
Practice Questions (Chapter 8 (Note: In order to provide some incentives, your scores will be recorded and the top 20% scorers of practice questions at the end of the semester will receive some extra credit.) 1. Aggregate consumption will certainly increase if a) income increases and wealth decreases. b) income increases and interest rates decrease. c) interest rates increase and household wealth decreases. d) interest rates increase and consumer confidence about the future strengthens. 2. The MPC is a) the...
4) In each of the following situations, list what will happen to the equilibrium price and...
4) In each of the following situations, list what will happen to the equilibrium price and the equilibrium quantity for a particular product, which is an inferior good. a. The population decreases and productivity increases b. Income increases and the price of inputs increase c. The number of firms in the market decreases and income decreases d. Consumer preference decreases and the price of a complement increases e. The price of a substitute in consumption increases and the price of...
Suppose the following table describes the relation of consumption spending to the disposable income Disposable Income...
Suppose the following table describes the relation of consumption spending to the disposable income Disposable Income (Yp)|400 500 600 700 800 Consumption ( 390 470 550 630 710 (a) Derive the consumption function. Explain the two components of (e) What is the level of saving when the level of income equals to $900, to $350, to $300? Redraw the graphs from points (a) and (d) and show the areas of saving and dissaving. (f) Suppose income grows from $850 to...
Suppose when disposable income (D) is $1000/month, consumption (C) is $400/month. When disposable income is $2500/month,...
Suppose when disposable income (D) is $1000/month, consumption (C) is $400/month. When disposable income is $2500/month, consumption increases to $700/month. Which of the following equation represents the relationship between consumption and disposable income in this example?
I am not understanding this question, please explain. thank you! 84%E) 8:39 PM Wed Oct 30...
I am not understanding this question, please explain. thank
you!
84%E) 8:39 PM Wed Oct 30 5) Assume interest rates equal 10% and there is a decrease in current income of $1000, and an increase in future income of $1100, it will lead to A) an increase in current consumption, a decrease in future consumption, and an increase in saving B) a decrease in current consumption, an increase in future consumption, and a decrease in saving. C) no change in...
What is likely to happen to the slope of the budget line of movie tickets when:...
What is likely to happen to the slope of the budget line of movie tickets when: (Show work and show graph) a. your income increases from $100 to $150 (4) b. Price of the movie tickets changes from $20 to $26 a ticket
6. Consider a consumer that lives for two periods and chooses consumption in period 1 and...
6. Consider a consumer that lives for two periods and chooses consumption in period 1 and in period 2. At the current interest rate of 10% the consumer borrows $10,000. If the interest rate increases to 30% what will happen to saving in period 1? (a) Saving in period 1 increases unambiguously. (b) Saving in period 1 decreases unambiguously. (c) Saving in period 1 does not change. (d) Saving in period 1 could either increase or decrease (uncertain)
A,B,C,D
Given this information, answer the following questions: A) How much will consumption increase if disposable income increases by $400? Show your work. B) Suppose there is a decrease in investment of S1,200. What will be the total decrease in Real GDP caused by this decrease in investment? Show your work. C) If autonomous consumption is S100, write the consumption function of this economy. D) If the economy's savings rate decreases, how will this most likely affect the MPC (increase,...
Did I answer these questions correctly?
20. What is likely to happen to the Demand for irrigation water when corm prices rise significantly due to an ethanol boom? (don 't calculate numbers, just state whether aggregate demand increases or decreases) a Demand increases (shifts up) price rises, quantities sold increase b. Demand decreases (shifts down) price falls, quantities sold decrease c. Supply increases (shifts down) price falls, quantities sold increase d. Supply decreases (shifts up) price rises, quantities sold decrease...
Practice Questions (Chapter 8 (Note: In order to provide some incentives, your scores will be recorded and the top 20% scorers of practice questions at the end of the semester will receive some extra credit.) 1. Aggregate consumption will certainly increase if a) income increases and wealth decreases. b) income increases and interest rates decrease. c) interest rates increase and household wealth decreases. d) interest rates increase and consumer confidence about the future strengthens. 2. The MPC is a) the...
4) In each of the following situations, list what will happen to the equilibrium price and the equilibrium quantity for a particular product, which is an inferior good. a. The population decreases and productivity increases b. Income increases and the price of inputs increase c. The number of firms in the market decreases and income decreases d. Consumer preference decreases and the price of a complement increases e. The price of a substitute in consumption increases and the price of...
Suppose the following table describes the relation of consumption spending to the disposable income Disposable Income (Yp)|400 500 600 700 800 Consumption ( 390 470 550 630 710 (a) Derive the consumption function. Explain the two components of (e) What is the level of saving when the level of income equals to $900, to $350, to $300? Redraw the graphs from points (a) and (d) and show the areas of saving and dissaving. (f) Suppose income grows from $850 to...
I am not understanding this question, please explain. thank
you!
84%E) 8:39 PM Wed Oct 30 5) Assume interest rates equal 10% and there is a decrease in current income of $1000, and an increase in future income of $1100, it will lead to A) an increase in current consumption, a decrease in future consumption, and an increase in saving B) a decrease in current consumption, an increase in future consumption, and a decrease in saving. C) no change in...
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