For a hypothetical economy, suppose the consumption equation is C = 30 + 0.65Y, where C...
-
For a hypothetical economy,
suppose the consumption equation is C = 30 + 0.65Y, where C is
households’ consumption and Y is disposable income. If the
disposable income is $600, carefully show your steps and
calculate:
- The levels of (i) consumption and (ii) saving.
- The marginal propensity to (i) consume and (ii) save.
- The average propensity to (i) consume and (ii) save.
- Interpret your estimates in (c).
Homework Answers
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For a hypothetical economy,
suppose the consumption equation is C = 30 + 0.65Y, where C...
5. Graphing the consumption function from the MPC Consider a hypothetical economy in which the marginal...
5. Graphing the consumption function from the MPC Consider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.50. That is, if disposable income increases by $1, consumption increases by 50¢. Suppose further that last year disposable income in the economy was $400 billion and consumption was $350 billion. On the following graph, use the blue line (circle symbol) to plot this economy's consumption function based on these data. Consumption Function CONSUMPTION (Billions of dollars) 0 800...
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...
. 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...
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.
ADVANCED ANALYSIS Suppose that the linear equation for consumption in a hypothetical economy is: C= 60...
ADVANCED ANALYSIS Suppose that the linear equation for consumption in a hypothetical economy is: C= 60 + 0.7Y Also suppose that income (Y) is $600. Determine the following values: Instructions: For parts a, b, d, and f, round your answers to 2 decimal places. For parts cand e, enter your answers as whole numbers. a. MPC = b. MPS = c. Consumption d. APC = e. Saving = 1. APS =
Aggregate expenditure is total value added in the economy income of households, businesses, governments, and foreigners....
Aggregate expenditure is total value added in the economy income of households, businesses, governments, and foreigners. revenue from the sale of goods and services. spending on final goods and services. The MPC can be defined as the change in consumption divided by the change in income. change in income divided by the change in consumption. ratio of income to saving. ratio of saving to consumption. The relationship between the MPS and the MPC is such that MPC - MPS =...
Imagine the economy is defined by the consumption function of C = 140 + 0.9 (Yd)...
Imagine the economy is defined by the consumption function of C = 140 + 0.9 (Yd) where 140 is autonomous consumption, 0.9 is marginal propensity to consume, and Yd is disposable income (after taxes) and Yd=Y-T, where Y is national income (or GDP) and T=Tax Revenues=0.3Y (0.3 is the avg. income tax rate). To find the macro equilibrium use the following equation Y = C + I + G + (X - M). Where C=140 + 0.9(Yd), I=400, G=800, X=600,...
Would someone explain to me how to get the answers, please. I need the graphs plotted,...
Would someone explain to me how to get the
answers, please. I need the
graphs plotted, the blue box answer, and the fill in the blanks
answered. Below are the options.
Options for the first graph it says: From the preceding data,
you know that the level of saving in the economy was ($140
billion, $20 billion, $0 billion, $100 billion) and the
marginal propensity to save in the economy is (0.6, 0.8,
0.1, 0.2)
Options for the second graph...
is to Complete the following table which depicts a hypothetical economy in which the marginal propensity...
is to Complete the following table which depicts a hypothetical economy in which the marginal propensity to save is constant at all levels of real GDP investment spending is autonomous, and there is no government. Note: Enter whole numbers and use the minus sign where needed. Real GDP Consumption Investment Saving $ - 500 $0 2000 4000 6000 8000 10000 $500 2000 3500 5000 6500 8000 $1500 1500 1500 1500 500 1000 1500 2000 1500 1500 This economy's marginal propensity...
Consider the following table for a? household's consumption expenditures and disposable income. To the nearest? dollar,...
Consider the following table for a? household's consumption expenditures and disposable income. To the nearest? dollar, compute desired saving at each level of disposable income. ?(Enter your responses as whole numbers and include a minus sign where? appropriate.) Income Consumption Savings ?$0 ?$100 ?$ ?$100 ?$150 ?$ ?$200 ?$200 ?$ ?$300 ?$250 ?$ ?$400 ?$300 ?$ ?$500 ?$350 ?$ The marginal propensity to save is ____. ?(Enter your response rounded to two decimal? places.) The marginal propensity to save ____...
5. Graphing the consumption function from the MPC Consider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.50. That is, if disposable income increases by $1, consumption increases by 50¢. Suppose further that last year disposable income in the economy was $400 billion and consumption was $350 billion. On the following graph, use the blue line (circle symbol) to plot this economy's consumption function based on these data. Consumption Function CONSUMPTION (Billions of dollars) 0 800...
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...
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.
ADVANCED ANALYSIS Suppose that the linear equation for consumption in a hypothetical economy is: C= 60 + 0.7Y Also suppose that income (Y) is $600. Determine the following values: Instructions: For parts a, b, d, and f, round your answers to 2 decimal places. For parts cand e, enter your answers as whole numbers. a. MPC = b. MPS = c. Consumption d. APC = e. Saving = 1. APS =
Would someone explain to me how to get the
answers, please. I need the
graphs plotted, the blue box answer, and the fill in the blanks
answered. Below are the options.
Options for the first graph it says: From the preceding data,
you know that the level of saving in the economy was ($140
billion, $20 billion, $0 billion, $100 billion) and the
marginal propensity to save in the economy is (0.6, 0.8,
0.1, 0.2)
Options for the second graph...
is to Complete the following table which depicts a hypothetical economy in which the marginal propensity to save is constant at all levels of real GDP investment spending is autonomous, and there is no government. Note: Enter whole numbers and use the minus sign where needed. Real GDP Consumption Investment Saving $ - 500 $0 2000 4000 6000 8000 10000 $500 2000 3500 5000 6500 8000 $1500 1500 1500 1500 500 1000 1500 2000 1500 1500 This economy's marginal propensity...
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