In an economy with no taxes and no imports, disposable income decreases from $6,000 to $4,000....
Homework Answers
MPS= 1- MPC
MPS= marginal propensity to save
MPC= marginal propensity to consume
MPC= change in consumption / change in income OR ▲C/ ▲Y
= 3000- 4500 / 4000-6000
= - 1500/ - 2000
= 0.75
MPS= 1- 0.75
= 0.25
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In an economy with no
taxes and no imports, disposable income decreases from $6,000 to
$4,000....
In an economy, when disposable income increases from $400 to $500, consumption expenditure increases from $420...
In an economy, when disposable income increases from $400 to $500, consumption expenditure increases from $420 billion to $500. Calculate the marginal propensity to consume, the change in saving, and the marginal propensity to save. The marginal propensity to consume is 0.80. >>> Answer to 2 decimal places. When disposable income increases from $400 billion to $500 billion, saving increases by $ 20 billion. The marginal propensity to save is 0.20 >>> Answer to 2 decimal places.
4. In a simple economy (assume there are no taxes; thus, Y is disposable income), the...
4. In a simple economy (assume there are no taxes; thus, Y is disposable income), the consumption function is: C = 500+ 0.80Y. The current level of real GDP is $5000. At this level of real GDP, consumption will be $ $1000, consumption would increase by $ and savings will be $ If GDP were to increase by (Round your responses to the nearest dollar.) , and the average propensity to save is At a real GDP level of $5000,...
Suppose the following table describes the relation of consumption spending to the disposable income Disposable Income...
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...
Suppose an economy has no income taxes or imports. How is the size of the expenditure...
Suppose an economy has no income taxes or imports. How is the size of the expenditure multiplier related to the marginal propensity to consume? What is the multiplier if the MPC equals 0.25? If the MPC equals 0.50? If the MPC equals 0.90?
. 1. The data below pertain to a hypothetical private economy. Disposable Income (Y) Consumption (C)...
.
1. The data below pertain to a hypothetical private economy. Disposable Income (Y) Consumption (C) $ 0 $ 60 100 130 200 200 300 270 400 340 Use the above data to answer the questions below: 1. Write the linear equation representing the economy's consumption schedule. Clearly show your steps and calculations. 2. With your equation in (1), calculate the economy's consumption at $385 level of disposable income. Clearly show your steps and calculations. 3. Estimate the economy's average...
6. The marginal propensity to consume (mpc) is the: A, amount by which disposable income increases...
6. The marginal propensity to consume (mpc) is the: A, amount by which disposable income increases when consumption increases by $1 B. amount by which consumption increases when disposable income increases by $1 percentage by which consumption increases when disposable income increases by 1% D, percentage by which disposable income increases when consumption increases by 1% 7. Data on output and planned aggregate expenditure in Macroland are given below. 2,000 3,000 4,000 5,000 6,000 2,300 3,200 4,100 5,000 5,900 Based...
An economy has no imports and no taxes, the MPC is 0.8, and real GDP is...
An economy has no imports and no taxes, the MPC is 0.8, and real GDP is $250 billion. Businesses decrease investment by $5 billion. Calculate the new level of real GDP. Explain why real GDP decreases by more than $5 billion. The new level of real GDP is $ billion. Real GDP decreases by more than $5 billion because the decrease in investment_ 0 A. induces an increase in saving O B. decreases the marginal propensity to consume O C....
Suppose Ginny gets a sales bonus at her place of work that gives her an extra $600 of disposable income. She chooses to...
Suppose Ginny gets a sales bonus at her place of work that gives her an extra $600 of disposable income. She chooses to spend $360 and save the remaining $240. From this, you can tell that Ginnys marginal propensity to consume (MPC) is ______ and her marginal propensity to save is ____ Mathematically, it must always be true that: Saving = Disposable Income + Consumption Consumption - Disposable Income Disposable Income - Consumption Therefore, it must also be true that:...
Use the table below to answer the question. Disposable Income $10.000 $20,000 $30,000 $40.000 Consumption $12,000...
Use the table below to answer the question. Disposable Income $10.000 $20,000 $30,000 $40.000 Consumption $12,000 $20.000 $28,000 $36.000 The marginal propensity to save (MPS) is equal to and the marginal propensity to consume (MPC) is equal to 0.2:0.8 O 0.25:0.75 O 0.75:0.25 O 0.8:0.2 Use the table below to answer the question. Disposable Income $10,000 $20,000 $30,000 $40,000 Consumption $12,000 $20,000 $28,000 $36,000 Autonomous consumptly is equal to: $1,000 O $4,000. O $10,000. O $12,000.
Macroeconomics Assignment 2 1. The table shows disposable income and consumption expenditure in an economy. Use...
Macroeconomics Assignment 2 1. The table shows disposable income and consumption expenditure in an economy. Use the table to work Problems A and B. Disposable Consumption income expenditure (Billions of dollars) 800 1,000 A. Calculate saving at each level of disposable income. Over what range of disposable income does consumption expenditure exceed disposable income? Calculate autonomous consumption expenditure. B. Calculate the marginal propensity to consume. At what level of disposable income will savings be zero? If expected future income increases,...
In an economy, when disposable income increases from $400 to $500, consumption expenditure increases from $420 billion to $500. Calculate the marginal propensity to consume, the change in saving, and the marginal propensity to save. The marginal propensity to consume is 0.80. >>> Answer to 2 decimal places. When disposable income increases from $400 billion to $500 billion, saving increases by $ 20 billion. The marginal propensity to save is 0.20 >>> Answer to 2 decimal places.
4. In a simple economy (assume there are no taxes; thus, Y is disposable income), the consumption function is: C = 500+ 0.80Y. The current level of real GDP is $5000. At this level of real GDP, consumption will be $ $1000, consumption would increase by $ and savings will be $ If GDP were to increase by (Round your responses to the nearest dollar.) , and the average propensity to save is At a real GDP level of $5000,...
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...
.
1. The data below pertain to a hypothetical private economy. Disposable Income (Y) Consumption (C) $ 0 $ 60 100 130 200 200 300 270 400 340 Use the above data to answer the questions below: 1. Write the linear equation representing the economy's consumption schedule. Clearly show your steps and calculations. 2. With your equation in (1), calculate the economy's consumption at $385 level of disposable income. Clearly show your steps and calculations. 3. Estimate the economy's average...
6. The marginal propensity to consume (mpc) is the: A, amount by which disposable income increases when consumption increases by $1 B. amount by which consumption increases when disposable income increases by $1 percentage by which consumption increases when disposable income increases by 1% D, percentage by which disposable income increases when consumption increases by 1% 7. Data on output and planned aggregate expenditure in Macroland are given below. 2,000 3,000 4,000 5,000 6,000 2,300 3,200 4,100 5,000 5,900 Based...
An economy has no imports and no taxes, the MPC is 0.8, and real GDP is $250 billion. Businesses decrease investment by $5 billion. Calculate the new level of real GDP. Explain why real GDP decreases by more than $5 billion. The new level of real GDP is $ billion. Real GDP decreases by more than $5 billion because the decrease in investment_ 0 A. induces an increase in saving O B. decreases the marginal propensity to consume O C....
Use the table below to answer the question. Disposable Income $10.000 $20,000 $30,000 $40.000 Consumption $12,000 $20.000 $28,000 $36.000 The marginal propensity to save (MPS) is equal to and the marginal propensity to consume (MPC) is equal to 0.2:0.8 O 0.25:0.75 O 0.75:0.25 O 0.8:0.2 Use the table below to answer the question. Disposable Income $10,000 $20,000 $30,000 $40,000 Consumption $12,000 $20,000 $28,000 $36,000 Autonomous consumptly is equal to: $1,000 O $4,000. O $10,000. O $12,000.
Macroeconomics Assignment 2 1. The table shows disposable income and consumption expenditure in an economy. Use the table to work Problems A and B. Disposable Consumption income expenditure (Billions of dollars) 800 1,000 A. Calculate saving at each level of disposable income. Over what range of disposable income does consumption expenditure exceed disposable income? Calculate autonomous consumption expenditure. B. Calculate the marginal propensity to consume. At what level of disposable income will savings be zero? If expected future income increases,...
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