3. (25 points: 12.5 each part) In the linear consumption function cons = B. + B,...
In the linear consumption function cons = A+ Ainc The (estimated) marginal propensity to consume (MPC) out of income is simply the slope, P, while the average propensity to consume (APC) is cons /inc /inc + β. Using observations for 100 families on annual income and consumption (both is obtained: cons =-124.84+0.853 inc n=100, R2=0.692 a. (5 points) Interpret the intercept in this equation, and comment on its sign and magnitude? b. (5 points) What is the predicted consumption when...
Question 1 0.8 pts Using observations on 100 families on annual income and consumption (both measured in dollars) the following linear consumption function is obtained cons = -124.84 +0.853inc What is the predicted consumption when family income is $50,000? (Enter a number)
B,c,d,e please solve Suppose in the economy autonomous consumption - $100, autonomous investmen $120, government purchases G-$400 lump-sum taxes = $70, transfers Tr-$20, exports Er $150 autonomous imports im = $30, marginal propensity to consume mpc = 0.8, proportional income tax rate 1-20%, marginal propensity to invest mpi-0.1, and marginal propensity to imports mpm-0.4 (a) For this economy calculate (i) the amount of autonomous spending: (ii) the value of the spending multiplier; (iii) the equilibrium level of output; (iv) the...
SYNOPSIS The product manager for coffee development at Kraft Canada must decide whether to introduce the company's new line of single-serve coffee pods or to await results from the product's launch in the United States. Key strategic decisions include choosing the target market to focus on and determining the value proposition to emphasize. Important questions are also raised in regard to how the new product should be branded, the flavors to offer, whether Kraft should use traditional distribution channels or...