Change in consumption Change in saving $5 Change in income Initial round $29 Second round $...
QUESTION 1 Change in Consumption Change in Income Change in Saving Assumed Increase in Investment Second Round All Other Rounds Totals $20 $4.00 $12.80 $51.20 $20.00 Refer to the given table, which illustrates the multiplier process. The marginal propensity to consume is O 0.75 0.8 0.5 0.9
Use the table below to determine the MPC and MPS. Disposable Income Consumption Saving $1000 $1100 -$100 2000 1600 400 3000 2100 900 1. Using the above information, what is the MPC and MPS when the DI is 3000? MPC = MPS = 2. What equation could you use to determine the Multiplier, using MPC and MPS? Multiplier = Multiplier = 3. If there is an initial investment spending of $5,000; what would the total change in GDP...
Collabon Short-Answer, Essays, and Problems 1. What are the relationships among consumption, saving, and disposable income? 2. Define the consumption schedule. 3. Describe the saving schedule. 4. Explain how consumption and saving are related to disposable income in the aggregate expenditures model. 5. Fill in the table below. Describe your result. Disposable Income Consumptio Saving $200 $210 $ $220 $230 $10 $260 $20 $280 $300 6. Complete the following table assuming that (a) MPS - 1/5, (b) there is no...
Consider the following information on aggregate income, consumption expenditure, and planned investment for a country: nu, no Aggregate Output/income $1,800 2,000 2200 2,400 2,600 2.800 3,000 3.200 Consumption $1,800 1,950 2,100 2.250 2.400 2.550 2,700 2.850 Planned Investment $200 200 200 200 200 200 200 nud indo jes, ced roduc When aggregate income is $3,000, O A. saving is $40 and unplanned investment (inventory change) is $100. OB. saving is $300 and unplanned investment (inventory change) is $100. OC. saving...
Suppose that disposable income, consumption, and saving in some country are $800 billion, $700 billion, and $100 billion, respectively. Next, assume that disposable income increases by $80 billion, corisumption rises by $56 blillion, and saving goes up by $24 billion. a. What is the economy's MPC? Instructions: Round your answers to 2 decimal places MPC= What Is its MPS? MPS b. What was the APC before the increase in disposable income? Instructions: Round your answer to 2 decimal places. APC...
2. Saving and investment in the national income accounts The following table contains data for a hypothetical closed economy that uses the dollar as its currency. Suppose GDP in this country is $1,330 million. Enter the amount for government purchases. National Income Account Value (Millions of dollars) Government Purchases (GG) Taxes minus Transfer Payments (TT) 455 Consumption (CC) 700 Investment (II) 280 Complete the following table by using national income accounting identities to calculate national saving. In your calculations, use...
The following table shows the relationship between income and consumption in an economy. Income (Y) ($ billion) Consumption (C) ($ billion) 0 5 10 11 20 17 30 23 40 29 50 35 60 41 70 47 80 53 90 59 100 65 Assume Investment (I) is $5 billion, government purchases (G) are $4 billion, and net exports (X) are $2 billion. Assume net taxes (T) equal zero. a. What is the numerical value of the marginal propensity to...
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...
2. Saving and investment in the national income accounts The following table contains data for a hypothetical closed economy that uses the dollar as its currency. Suppose GDP in this country is $1,230 million. Enter the amount for government purchases. National Income Account Value (Millions of dollars) Government Purchases (GG) Taxes minus Transfer Payments (TT) 210 Consumption (CC) 600 Investment (II) 330 Complete the following table by using national income accounting identities to calculate national saving. In your calculations, use...
1. According to Keynesian theory, the primary determinant of the level of consumption and saving in the economy is the: a. level of investment. c. level of prices. b. level of income. d. interest rate. 2. If a family's MPC is. 7, it is: a. spending 70 percent of its income on consumer goods. b. necessarily dissaving. c. spending seventenths of any increment to its income d. operating at the breakeven point. The size of the MPC is assumed to...