What determines consumption and investment?
What determines consumption and investment?
Homework Answers
Consumption is a positive function of consumer wealth, future economic outlook and expected future inflation rate. The higher (lower) the wealth and/or the higher (lower) the consumer confidence level (regarding future economic performance) and/or the higher (lower) the expected price that consumers anticipate in future, the higher (lower) the current consumption. In addition, consumption is a negative function of interest rate. The higher (lower) the interest rate, the lower (higher) the consumption.
Investment is a positive function of income, future economic outlook and ease of doing business. The higher (lower) the income and/or the higher (lower) the business confidence level (regarding future economic performance) and/or the higher (lower) the ease of doing business in a country, the higher (lower) the investment. In addition, investment is a negative function of interest rate. The higher (lower) the interest rate, the lower (higher) the investment.
2-3 paragraphs, use math & graphs were needed (intermediate level eco; no calculus). What determines consumption...
2-3 paragraphs, use math & graphs were needed (intermediate level eco; no calculus). What determines consumption and investment?
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.
What is crowding out? O a reduction in consumption and investment spending that results from government...
What is crowding out? O a reduction in consumption and investment spending that results from government borrowing O a reduction in consumption and investment spending that results from increased international trade O a reduction in government borrowing resulting from increases in consumption and investment spending O a reduction in investment, but not consumption, that results from government borrowing O a reduction in consumption, but not investment, that results from government borrowing are a mechanism by which crowding out occurs. OIncreases...
During recessions which type of spending falls? Group of answer choices investment but not consumption. consumption...
During recessions which type of spending falls? Group of answer choices investment but not consumption. consumption but not investment. consumption and investment. neither consumption nor investment.
1) During a recession a. both consumption and investment fall, but consumption falls more b. both...
1) During a recession a. both consumption and investment fall, but consumption falls more b. both consumption and investment fall, but investment falls more c. consumption rises and investment falls d. investment falls and consumption rises 2) The Fed does monetary policy by raising the money supply with the hope of raising real GDP. In the long run, the result will be a. only an increase in prices b. successful as long as the Fed sells bonds in the open...
Read chapter 6 and Prepare a two-page report on: What was the percentage of consumption, investment,...
Read chapter 6 and Prepare a two-page report on: What was the percentage of consumption, investment, government expenditure exports and imports in the GDP of Canada in last two years (2018 and 2019)? comparative analysis of the change in percentage of expenditure on consumption, investment, government expenditure exports and imports between 2018 and 2019. What factors were responsible for this change? please make a report on these questions with suitable examples
If the consumption function is C= 100+ 0.95Y and planned investment spending is 200, what will...
If the consumption function is C= 100+ 0.95Y and planned investment spending is 200, what will be the equilibrium level of output? Ye=$ (Enter your response as an integer.)
In Zembla in 2018, Consumption was 220, residential investment was 20, nonresidential investment was 30, there...
In Zembla in 2018, Consumption was 220, residential investment was 20, nonresidential investment was 30, there was no change in business inventory, government spending was 45, exports were 60 and imports were 75. What was GDP?
Given the following consumption schedule and investment schedule: 7. Given the following consumption schedule and investment...
Given the following consumption schedule and investment
schedule:
7. Given the following consumption schedule and investment schedule $4000 $5250 8000 9200 11400 11910 14300 14520 12 10 08 05 500 750 1000 1375 8850 9930 Determine the specific linear equation for each function. Do not round numbers Find the numerical value of break-even income (YB), and equilibrium income (Ye). Assume that i .04 Explain and show the multiplier effect of an interest rate change to .03
2. Let capital investment=10, planned inventory investment=10, consumption=120 when income=100, consumption=200 when income=200. planned and unplanned...
2. Let capital investment=10, planned inventory investment=10, consumption=120 when income=100, consumption=200 when income=200. planned and unplanned inventory chang (a) Complete the table below. must be equal to savi: Unplanned Actual/ Actual inventory inventory investment change 100 200 300 400 (b) What are the MPC, MPS, and multiplier? ..................... (c) What are the consumption function and saving function? 1001 100 SAL (d) Draw the AE curve and indicate the equilibrium in the AE diagram. +40+ +407 (e) Draw the investment curve...
What is crowding out? O a reduction in consumption and investment spending that results from government borrowing O a reduction in consumption and investment spending that results from increased international trade O a reduction in government borrowing resulting from increases in consumption and investment spending O a reduction in investment, but not consumption, that results from government borrowing O a reduction in consumption, but not investment, that results from government borrowing are a mechanism by which crowding out occurs. OIncreases...
If the consumption function is C= 100+ 0.95Y and planned investment spending is 200, what will be the equilibrium level of output? Ye=$ (Enter your response as an integer.)
Given the following consumption schedule and investment
schedule:
7. Given the following consumption schedule and investment schedule $4000 $5250 8000 9200 11400 11910 14300 14520 12 10 08 05 500 750 1000 1375 8850 9930 Determine the specific linear equation for each function. Do not round numbers Find the numerical value of break-even income (YB), and equilibrium income (Ye). Assume that i .04 Explain and show the multiplier effect of an interest rate change to .03
2. Let capital investment=10, planned inventory investment=10, consumption=120 when income=100, consumption=200 when income=200. planned and unplanned inventory chang (a) Complete the table below. must be equal to savi: Unplanned Actual/ Actual inventory inventory investment change 100 200 300 400 (b) What are the MPC, MPS, and multiplier? ..................... (c) What are the consumption function and saving function? 1001 100 SAL (d) Draw the AE curve and indicate the equilibrium in the AE diagram. +40+ +407 (e) Draw the investment curve...
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