A. |
$8.00
|
|
B. |
$0.80
|
|
C. |
$80
|
|
D. |
$20
|
|
E. |
$500
|
MPC = change in spending / change in income
Hence when the disposable income falls by $100, the consumption spending will fall by $80 ($1,000*0.80)
If the MPC in an economy equals 0.8, and disposable income falls by $100, consumption spending...
the consumption function for an economy is C# 180 + 75 Yd (disposable Income) and spending increases by $800, then the resulting change in national income is a +$2,800 b. 5-3,200 OC $2,800 d. $+3,200 1 points Save Answer QUESTION 5 Assume the actual GOP IS $4800 and the potential GOP is $4400. The economy's MPC is.75. What should the government do to eliminate the gap? a. raise taxes by $100 b. cut taxes by $75 c. increase government spending...
The following data for an imaginary economy. MPC = b = 0.8 , autonomous consumption = $50 M , Investment = $100 M , Government spending = $80 M, Transfer payments = $40 M, Taxes = $12 M Using this data calculate: a. The level of national income b. The level of Saving
Keynesian Consumption Function (billions of dollars per year) Real disposable income Consumption Saving MPC MPS $100 200 300 400 500 $150 200 250 300 350 a.) Calculate the saving schedule. b. Determine the marginal propensities to consume (MPC) and save (MPS). c. Determine the break-even income. d.) What is the relationship between the MPC and the MPS? 3. Explain why the MPC and the MPS must always add up to one. 4. How do households "dissave" 5. Explain how each...
If personal income taxes are increased by $10, MPC=0.8, then disposable income will _____and consumption will_____. increase by $10; increase by $8. stay the same, stay the same decrease by $10; decrease by $8. decrease by $10; decrease by $10
how much will a $100 tax cut increase disposable income? How much will it increase consumption? (hint: mpc=.75) Taxes cause income and consumption to fall disposable income will rise by $75 Consumption will rise by $100 consumption and income will rise by $100 consumption will rise by $75 disposable income will rise by $100
The MPC is A) the change in consumption divided by the change in income. B) consumption divided by income. C) the change in consumption divided by the change in saving. D) the change in saving divided by the change in income. The MPS is A) the change in saving divided by the change in income. B) 1 + MPC C) income divided by saving. D) total saving divided by total income Saving equals A) Y-C. B) Y - planned 1....
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 $850 to...
10 Fill in the missing information in the table below. Disposable income ($) Consumption spending (S) 9, 900 10 MPC points 10, e00 11, 600 11, 10 13, 200 12, 300 14,000 0.8 eBook 13,900 0.6 Print References
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 50ยข. 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...
The table below shows the after-tax income and consumption spending for a nation. a. Calculate the dollar amount of savings, the marginal propensity to consurfe (MPC), and the marginal propensity to save (MPS) for each level of income. Instructions: Enter your answers for savings as a whole number. Round your answers for MPC and MPS to two decimal places. After-Tax Income and Consumption Spending Consumption Spending (dollars) $9,540 After-Tax Income (dollars) $18,700 Savings (dollars) MPC MPS $ 23,640 13,860 19,180...