Homework Answers
(1) C = 150000 + 0.95Y
MPC = dC / dY
MPC = 0.95
Marginal propensity to consume is 0.95
MPC = dC / dY
0.95 = dC / $27 billion.
dC = 0.95 * ($27 billion)
dC = $25.65 billion.
Aggregate consumtpion spending will increase by $25.65 billon if aggegate income increases by $27 billion.
(2) Saving (S) = Y - C
S= Y -C
0 = Y - 150000 -0.95Y
0 = 0.05Y - 150000
0.05Y = 150000
Y = 150000 / 0.05
Y = 3000000
Y = $3000000
At Y = $3000000, Saving will be zero.
(3) C = 150000 + 0.95Y
S = -150000 + (1-0.95) Y
S = -150000 + 0.05Y (Saving function)
MPS = dS / dY
MPS = 0.05
Marginal propensity to save is 0.05
MPS = dS / dY
0.05 = dS / $27 billion.
dS = 0.05 * ($27 billion)
dS = $1.35 billion.
Aggregate saving will increase by $1.35 billon if aggegate income increases by $27 billion.
(4)
| Y | C | S |
| 0 | 150000 | -150000 |
| 10000 | 159500 | -149500 |
| 50000 | 197500 | -147500 |
| 100000 | 245000 | -145000 |
| 500000 | 625000 | -125000 |
| 1000000 | 1100000 | -100000 |
| 10000000 | 9650000 | 350000 |
(5)
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Would someone explain to me how to get the
answers, please. I need the
graphs plotted, the blue box answer, and the fill in the blanks
answered. Below are the options.
Options for the first graph it says: From the preceding data,
you know that the level of saving in the economy was ($140
billion, $20 billion, $0 billion, $100 billion) and the
marginal propensity to save in the economy is (0.6, 0.8,
0.1, 0.2)
Options for the second graph...
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