Homework Answers
Multiplier = 1 / 1-MPC
As the MPC here is 0.75 then the MPC will be 1 / 1- 0.75 = 4.
The value of the multiplier will be 4 only.
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is to Complete the following table which depicts a hypothetical economy in which the marginal propensity...
Text Problem 12-2ab Question Help Complete the following table which depicts a hypothetical economy in which...
Text Problem 12-2ab Question Help Complete the following table which depicts a hypothetical economy in which the marginal propensity to save is constant at all levels of real GDP, investment spending is autonomous, and there is no govemment Note: Enter whole numbers and use the minus sign where needed Real GDP Consumption Saving Investment $500 $-500 $1500 2000 2000 4000 6000 ВОор 10000
Consider two economies, A and B. Economy A has a marginal propensity to consume of 0.9,...
Consider two economies, A and B. Economy A has a marginal propensity to consume of 0.9, a net tax rate of 0.3 and a marginal propensity to import of 0.3. Economy B has a marginal propensity to consume of 0.9, a net tax rate of 0.1 and a marginal propensity to import of 0.3. Suppose there is an increase in autonomous investment of $5 billion in each of these economies. Which of the following statements is true? Group of answer...
10.) An economy has a marginal propensity to consume and Y* , income-expenditure equilibrium GDP,...
10.) An economy has a marginal propensity to consume and Y* , income-expenditure equilibrium GDP, equals $500 billion. Given an autonomous increase in plannėd investment of $10 billion, show the rounds of increased spending that take place by completing the accompanying table. The first and second rows are filled in for you. In the first row the increase of planned investment spending of $10 billion raises real GDP and YD by $10 billion, leading to an increase in consumer spending...
The following table shows alternative hypothetical economies and the relevant values for the marginal propensity to...
The following table shows alternative hypothetical economies and the relevant values for the marginal propensity to consume out of disposable income (MPC), the net tax rate (t), and the marginal propensity to import (m). a. Recall that z, the marginal propensity to spend out of national income, is given by the simple expression Z-MPC(1-1)-m. By using this expression, compute z and the simple multiplier for each of the economies and fill in the table. (Round your response to two decimal...
HW Score: 48.49 % , 14.55 of 30 pts Text Problem 12-2c Question Help The following table depicts a hypolthetical ec...
HW Score: 48.49 % , 14.55 of 30 pts Text Problem 12-2c Question Help The following table depicts a hypolthetical economy in which the marginal propensity to save is constant at all levels of real GDP, investment spending is autonomous, and there is no govemment. 12- Real GDP Consumption $1,000 11- Saving $-1000 Investment OS 2,000 10- $1,000 1,000 1,000 2,500 4,000 5,500 7,000 8.500 -500 9 4,000 0 8- 6,000 500 1,000 74 8,000 1,000 1,500 1,000 1,000 10,000...
2. Given the following data representing the goods market in an open economy Marginal propensity to...
2. Given the following data representing the goods market in an open economy Marginal propensity to consume Autonomous consumption Direct tax rate Autonomous Taxation Transfers Gov spending 0.5 300 0.1 100 200 Investment Mareinal propensity to import Autonomous imports Exports 10000 2000 0.2 50 6000 uning the Keymnesan cross model compute a) The equilibrium level of the aggregate output b) The value of public savings corresponding to the equilbrium level of the output; say if the country is running a...
5. Graphing the consumption function from the MPC Consider a hypothetical economy in which the marginal...
5. Graphing the consumption function from the MPC Consider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.50. That is, if disposable income increases by $1, consumption increases by 50¢. Suppose further that last year disposable income in the economy was $400 billion and consumption was $350 billion. On the following graph, use the blue line (circle symbol) to plot this economy's consumption function based on these data. Consumption Function CONSUMPTION (Billions of dollars) 0 800...
Z. Given the following data representing the goods market in an open economy Marginal propensity to...
Z. Given the following data representing the goods market in an open economy Marginal propensity to consume 0.5 300 Direct tax rate Autonomous Taxation Transfers 0.1 100 200 10000 Gov spending 2000 0.2 50 6000 investment Marrinal propensity to import Autonomous imports Exports Using the Keynesian cross-model, compute a) The equilibrium level of the aggregate output The value of public savings corresponding to the equilibrium level of the output; say if the country is running a budget deficit or surplus...
Here are some facts about the economy of Inferior. Marginal propensity to consume 3/5 marginal propensity...
Here are some facts about the economy of Inferior. Marginal propensity to consume 3/5 marginal propensity to import 0 autonomous consumption 4 exports 0 private investment 20 income tax rate 0 government expenditures 0 Income consumption investment government aggregate expenditures expenditures 0 10 20 30 40 50 60 70 80 90 What is equilibrium GDP?
Real GDP, consumption, and the marginal propensity to consume (MPC) for five hypothetical countri...
Real GDP, consumption, and the marginal propensity to consume (MPC) for five hypothetical countries are shown in the table below. a. Enter the current level of saving in the appropriate column in the table. b. Now suppose that GDP increases by $20 billion in each of the five countries. What would be the new level level of saving in each country? Show your answers in the table below. Country Real GDP (Billions) Consumption (Billions) MPC Current Level of Saving (Billions)...
Text Problem 12-2ab Question Help Complete the following table which depicts a hypothetical economy in which the marginal propensity to save is constant at all levels of real GDP, investment spending is autonomous, and there is no govemment Note: Enter whole numbers and use the minus sign where needed Real GDP Consumption Saving Investment $500 $-500 $1500 2000 2000 4000 6000 ВОор 10000
10.) An economy has a marginal propensity to consume and Y* , income-expenditure equilibrium GDP, equals $500 billion. Given an autonomous increase in plannėd investment of $10 billion, show the rounds of increased spending that take place by completing the accompanying table. The first and second rows are filled in for you. In the first row the increase of planned investment spending of $10 billion raises real GDP and YD by $10 billion, leading to an increase in consumer spending...
The following table shows alternative hypothetical economies and the relevant values for the marginal propensity to consume out of disposable income (MPC), the net tax rate (t), and the marginal propensity to import (m). a. Recall that z, the marginal propensity to spend out of national income, is given by the simple expression Z-MPC(1-1)-m. By using this expression, compute z and the simple multiplier for each of the economies and fill in the table. (Round your response to two decimal...
HW Score: 48.49 % , 14.55 of 30 pts Text Problem 12-2c Question Help The following table depicts a hypolthetical economy in which the marginal propensity to save is constant at all levels of real GDP, investment spending is autonomous, and there is no govemment. 12- Real GDP Consumption $1,000 11- Saving $-1000 Investment OS 2,000 10- $1,000 1,000 1,000 2,500 4,000 5,500 7,000 8.500 -500 9 4,000 0 8- 6,000 500 1,000 74 8,000 1,000 1,500 1,000 1,000 10,000...
2. Given the following data representing the goods market in an open economy Marginal propensity to consume Autonomous consumption Direct tax rate Autonomous Taxation Transfers Gov spending 0.5 300 0.1 100 200 Investment Mareinal propensity to import Autonomous imports Exports 10000 2000 0.2 50 6000 uning the Keymnesan cross model compute a) The equilibrium level of the aggregate output b) The value of public savings corresponding to the equilbrium level of the output; say if the country is running a...
5. Graphing the consumption function from the MPC Consider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.50. That is, if disposable income increases by $1, consumption increases by 50¢. Suppose further that last year disposable income in the economy was $400 billion and consumption was $350 billion. On the following graph, use the blue line (circle symbol) to plot this economy's consumption function based on these data. Consumption Function CONSUMPTION (Billions of dollars) 0 800...
Z. Given the following data representing the goods market in an open economy Marginal propensity to consume 0.5 300 Direct tax rate Autonomous Taxation Transfers 0.1 100 200 10000 Gov spending 2000 0.2 50 6000 investment Marrinal propensity to import Autonomous imports Exports Using the Keynesian cross-model, compute a) The equilibrium level of the aggregate output The value of public savings corresponding to the equilibrium level of the output; say if the country is running a budget deficit or surplus...
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