The correct answer is 0.1, 10 , -9
Given consumption function C = 600 + 0.9Yd
C = a + bYd. here b = MPC
So MPC = 0.9
MPS = 1- MPC = 1-0.9 = 0.1
Spending Multiplier (k) = 1/ 1- MPC = 1/1-0.9 = 1/0.1 = 10
Tax multiplier = - MPC / 1 - MPC = -0.9/ 1 -0.9 = -0.9 / 0.1 = -9
If the consumption function is C = $600 +0.9Y), the MPS is the government spending multiplier...
The larger the value of MPS, the: Smaller the value of the government spending multiplier. Larger the value of the government spending multiplier. Flatter the slope of the saving function. O Steeper the slope of the consumption function.
if c=20 +0.9Y c=consumption y=disposable income=800 billion what is the multiplier? also calculate MPS MPC APS APC and what is the value of saving for the nation? Question 2 If C = 20 + 0.99 C= Consumption Y = disposable income = $800 billion What is the Multipler? Ob.0.1
Question 18 6 pts If the consumption function is C - $250 +0.75(Y), the MPS is__, the government spending multiplier is multiplier is and the tax O 0.25: -3,4 0.25:4:-3 O 0.75:-3;4 O 0.75; 4;-3
Consumption Function: C=$300 Billion + 0.9Y The cumulative change in total spending if the government increases purchases of goods and services by $100 million AND at the same time increases taxes by $100 million will be: a. $0 b. $100 million c. $90 million d. $1 billion
1. Suppose the consumption function is C = $309 billion + 0.9Y If the government increases spending on new goods and services by $50 what is amount of the cumulative shift in AD? Enter your answer in whole numbers. For example, if your answer is $450.25 then enter 450 2. If the AD shortfall is $600 billion and the MPC is 0.8, how large is the desired fiscal stimulus? If your answer is $50 billion then enter 50
refer to table 24.6. the value of the government spending multiplier QUESTI 17 Refer to the information provided in Table 24.6 below to answer the question(s) that follow. Output (Income 2,400 2.500 3,000 3,200 3,400 3,600 3,800 Table 24.6 All Figures in Billions of Dollars Consumption Planned Net Spending Investment Government Taxes (C-100+ 9Yd Savings Purchases Spending 100 2,170 2,530 2,710 2,890 3,070 3.250 8R888R 8888888 Refer to Table 24.6. The value of the government spending multiplier is 10. is...
What is the formula for the government spending multiplier? Tax Multiplier? Calculate both multipliers assuming an MPC of .6 Graph an economy in the AD AS model with Potential Output of $600 and Real GDP at $450. Calculate the output gap and identify it as a recessionary or inflationary gap. How much fiscal stimulus is needed to close the gap? show work and use formulas for government spending multiplier and tax multiplier. Show all work Assume the government increases government...
5. Let C=120+0.6Yd, I=140, G=200, T=100. (a) What are government spending multiplier, tax multiplier, and balanced-budget multiplier? 0) What are be supue com (b) What are the output, consumption, saving, and budget deficit at the equilibrium? pusa aning and budget details equivat (c) What are the output, consumption, and saving if the government changes the budget deficit to zero by a change in G. G decreases 100 (d) What are the output, consumption, and saving if the government changes the...
(1) Calculate the government spending multiplier if, an increase in government spending by $5 million increases real GDP by $20 million. Group of answer choices 0.20 0.25 2 5 4 (2) A major benefit of automatic stabilizers is that they: Group of answer choices guarantee a balanced budget over the course of the business cycle. have a tendency to reduce the national debt. moderate the effect of fluctuations in the business cycle. require legislative review by Congress before they can...
Suppose consumption is given by: C=100+0.5(Y-T), planned investment is 200, government spending is 100, and the government is running a balanced budget. The tax multiplier is: