Homework Answers
When aggregate income is $3,000 then consumption is $2,700 and the planned investment is $200.
Calculate Saving -
Saving = Aggregate Income - Consumption
Saving = $3,000 - $2,700
Saving = $300
Calculate the Unplanned Investment -
Unplanned Investment = Aggregate Income - Consumption - Planned Investment
Unplanned Investment = $3,000 - $2,700 - $200
Unplanned Investment = $100
So,
When aggregate income is $3,000, savings is $300 and unplanned investment (inventory change) is $100.
Hence, the correct answer is the option (B).
Equilibrium level of income is achieved when aggregate income equals the sum of consumption and planned investment.
Aggregate income is equal to the sum of consumption and planned investment when aggregate income is $2,600.
So,
The equilibrium level of output/income is $2,600.
When income increases from $1,800 to $2,000, consumption increases from $1,800 to $1,950.
Change in income = $2,000 - $1,800 = $200
Change in consumption = $1,950 - $1,800 = $150
Calculate MPC -
MPC = Change in consumption/Change in income
MPC = $150/$200
MPC = 0.75
Thus,
The MPC is 0.75.
MPS = 1 - MPC
MPS = 1 - 0.75
MPS = 0.25
The MPS is 0.25
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how do you correctly do these problems? I am so
confused. my economics teacher is not a math teacher.
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DO NOT ANSWER UNLESS YOU CAN (TYPE) EVERYTHING
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how do you correctly do these problems? I am so
confused. my economics teacher is not a math teacher.
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Please properly anawer 2a, b, c. And please (TYPE)
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DO NOT ANSWER UNLESS YOU CAN (TYPE) EVERYTHING
OUT.
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