7) b
Multiplier = 1/(1-mpc+tmpc + mpm)
= 1/ (1-0.8+0.2*0.8 + 0.14) = 2
8) d
Change in income = multiplier *change in G
100= 2 * change in G
Change in G = 50
7. If marginal propensity to consume (mpc) is 0.8, tax rate (t) is 0.2, and marginal...
The marginal propensity to consume (MPC) is 0.60 The multiplier is 25 (Round your answer to one decimal place) Suppose that net exports changes by $-100 The change in real GDP will be S(Round your answer to the nearest dollar)
If the marginal propensity to consume (MPC) is 0.75, and if the goal is to increase real GDP by $400 million, then by how much would government spending have to change to generate this increase in real GDP? Group of answer choices a. $200 million. b. $400 million. c. $140 million. d. $100 million.
if the marginal propensity to consume (MPC) is equal to 0.7, government increases spending by $X, and the GDP increases by $1000. Calculate $X. A. $500 B. $100. C. There is not enough information to answer the question. D. $ 400. E. $300.
Marginal Propensity to Marginal Propensity to Consume (MPC) Save (MPS) Multiplier (m) 0.92 10 0.85 0.20 23). a). In the above table, what is the value of the marginal propensity to consume MPC) that correctly fills in blank (G) and the value of the income multiplier that correctly fills in blank (H)? Page 9 b)When the MPC increases, the income/spending multiplier (increases or decreas es). If MPC decreases? 17)Draw an AD and SRAS graph and label the axis, lines and...
Suppose the marginal propensity to consume is 0.8 and the tax rate is 0.25 and all other components of aggregate expenditures are determined outside the model. If the president wants to increase income by 500, her advisers would suggest that she increases government spending by: A. 50. O B. 100 C. 200 D. 250
If the marginal propensity to consume (MPC) equals 0.25 and the government increases spending by $600 billion, the total impact on GDP will be approximately:
Q. How do the marginal propensity to consume, the marginal propensity to import and the income tax ratio influence the multiplier? How do fluctuation in autonomous expenditure influence real GDP?
The following table shows alternative hypothetical economies and the relevant values for the marginal propensity to consume out of disposable income (MPC), the net tax rate (t), and the marginal propensity to import (m). a. Recall that z, the marginal propensity to spend out of national income, is given by the simple expression Z-MPC(1-1)-m. By using this expression, compute z and the simple multiplier for each of the economies and fill in the table. (Round your response to two decimal...
Suppose that marginal propensity to consume is equal to 0.8 .The government has the balanced budget right decide to increase government spending by $100 billion. This increase in spending is partially financed by a $50 billion They now. increase in taxes. Answer following questions: a) As a result of this, what happen to GDP? b) As a result of this, what happen to government budget (still we have the balanced one, or it creates deficit or it creates any unbalanced...
Suppose that the marginal propensity to consume in a country is 0.8, and the real potential output and current real GDP are respectively $800 billion and $700. To bring the economy to potential output, the government should increase its expenditure by $100 billion. True False