Homework Answers
Consumption depends positively on the disposable income and investment depends negatively on the real interest rate. The answer is "B" i.e. as the disposable income rises the consumption rise and as the real interest rises the investment falls.
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Consumption depends _______ on disposable income, and Investment depends _______ on the real interest rate a) Positively,...
7 and 8 QUESTION 7 Planned Consumption 40 10 20 Real Disposable Income/Yoar Refer to the...
7 and 8
QUESTION 7 Planned Consumption 40 10 20 Real Disposable Income/Yoar Refer to the above figure. Autonomous consumption equals $5000. 0. -$5000 $25,000 QUESTION 8 According to Keynes consumption is directly related to income but saving has no relationship with income. consumption is directly related to income but saving is inversely related to income. both consumption and saving are positively related to real disposable income. e consumption is positively related to the interest rate.
Is each of the following sets of variables positively related or negatively related? ANSWER OPTIONS ARE:...
Is each of the following sets of variables positively related or negatively related? ANSWER OPTIONS ARE: POSITIVELY RELATED OR NEGATIVELY RELATED a. The fraction of disposable income spent on consumption and the fraction of disposable income saved: b. The value of wealth and the amount of consumption spending: c. The interest rate and the fraction of disposable income saved: d. The interest rate and the fraction of disposable income consumed: e. Expected future income and consumption spending: f. Current income...
1. If disposable income is 4,000, consumption is 3,500, government spending is 1,000, and taxes minus...
1. If disposable income is 4,000, consumption is 3,500, government spending is 1,000, and taxes minus transfers are 800, national saving is equal to: a. 300. b. 500. c. 700. d. 1,000. 2. Assume that equilibrium GDP (Y) is 5,000. Consumption (C) is given by the equation C= 500 + 0.6Y. Investment (I) is given by the equation I= 2,000 – 100r, where r is the real interest rate in percent. No government exists. In this case, the equilibrium real...
The Keynesian model is based on the idea that O consumption is unrelated to the level...
The Keynesian model is based on the idea that O consumption is unrelated to the level of real Gross Domestic Product (GDP). saving depends only on the interest rate. both consumption and saving are positively related to real disposable income. o both consumption and saving are unrelated to the level of real Gross Domestic Product (GDP). 0.5 points QUESTION 2 Consumption goods are a form of investment. goods purchased from savings. goods purchased by households for immediate use. a form...
The consumption function is one of the key relationships in economics, where consumption y depends on disposable income...
The consumption function is one of the key relationships in economics, where consumption y depends on disposable income x. Consider the quarterly data for these seasonally adjusted variables, measured in billions of dollars. A portion of the data is shown in the accompanying table. Date Consumption Disposable Income DATE Consumption Disposable Income 2006:01 9144.90 9705.21 2006:04 9263.60 9863.81 2006:07 9262.60 9982.51 2006:10 9484.00 10111.23 2007:01 9635.00 10255.48 2007:04 9758.70 10358.61 2007:07 9854.20 10456.95 2007:10 9986.50 10623.42 2008:01 10071.30 10764.62 2008:04...
Keynesian Consumption Function (billions of dollars per year) Real disposable income Consumption Saving MPC MPS $100...
Keynesian Consumption Function (billions of dollars per year) Real disposable income Consumption Saving MPC MPS $100 200 300 400 500 $150 200 250 300 350 a.) Calculate the saving schedule. b. Determine the marginal propensities to consume (MPC) and save (MPS). c. Determine the break-even income. d.) What is the relationship between the MPC and the MPS? 3. Explain why the MPC and the MPS must always add up to one. 4. How do households "dissave" 5. Explain how each...
D Question 5 1 pts Use the following data to answer the next question. The disposable income (DI) and consumption...
D Question 5 1 pts Use the following data to answer the next question. The disposable income (DI) and consumption (C) schedules are for a private, closed economy. All figures are in billions of dollars. Disposable Income Consumption $300 350 $310 340 340 400 370 450 400 500 430 If disposable income is $550, we would expect consumption to be $430. $450. $460. $470 1 pts Question 9 The investment demand curve is drawn with the amount of investment on...
1. If the real interest rate is denoted by p, the present value of consumption in...
1. If the real interest rate is denoted by p, the present value of consumption in an intertemporal choice model of two periods is given by? a) ci +c2/(1+p) b) c1 (1-)+c7/(1-P) c) ci/(1+p) +c2/(1-P) d) ci tc2 2. The household's rate of time preference is given by a) the slope of the budget constraint. b) the slope of the indifference curves. c) the real rate of interest. d) the slope of the 45° line. 3. According to Keynes, the...
In a simple economy (assume there are no taxes, thus Y is disposable income). the consumption...
In a simple economy (assume there are no taxes, thus Y is disposable income). the consumption function is: C = 200 +0.75Y. Investment is equal to 300. In this economy, equilibrium GDP is $ (Round your answer to the nearest dollar.) Planned Real Consumption and Investment 400 0 400 300 1200 1800 2000 2400 2800 Real GDP per Year
On a graph with national consumption on the vertical axis and real disposable income on the...
On a graph with national consumption on the vertical axis and real disposable income on the horizontal axis, the slope of the line is almost always greater than one less than one infinitely elastic equal to one undefined
7 and 8
QUESTION 7 Planned Consumption 40 10 20 Real Disposable Income/Yoar Refer to the above figure. Autonomous consumption equals $5000. 0. -$5000 $25,000 QUESTION 8 According to Keynes consumption is directly related to income but saving has no relationship with income. consumption is directly related to income but saving is inversely related to income. both consumption and saving are positively related to real disposable income. e consumption is positively related to the interest rate.
The Keynesian model is based on the idea that O consumption is unrelated to the level of real Gross Domestic Product (GDP). saving depends only on the interest rate. both consumption and saving are positively related to real disposable income. o both consumption and saving are unrelated to the level of real Gross Domestic Product (GDP). 0.5 points QUESTION 2 Consumption goods are a form of investment. goods purchased from savings. goods purchased by households for immediate use. a form...
Keynesian Consumption Function (billions of dollars per year) Real disposable income Consumption Saving MPC MPS $100 200 300 400 500 $150 200 250 300 350 a.) Calculate the saving schedule. b. Determine the marginal propensities to consume (MPC) and save (MPS). c. Determine the break-even income. d.) What is the relationship between the MPC and the MPS? 3. Explain why the MPC and the MPS must always add up to one. 4. How do households "dissave" 5. Explain how each...
D Question 5 1 pts Use the following data to answer the next question. The disposable income (DI) and consumption (C) schedules are for a private, closed economy. All figures are in billions of dollars. Disposable Income Consumption $300 350 $310 340 340 400 370 450 400 500 430 If disposable income is $550, we would expect consumption to be $430. $450. $460. $470 1 pts Question 9 The investment demand curve is drawn with the amount of investment on...
1. If the real interest rate is denoted by p, the present value of consumption in an intertemporal choice model of two periods is given by? a) ci +c2/(1+p) b) c1 (1-)+c7/(1-P) c) ci/(1+p) +c2/(1-P) d) ci tc2 2. The household's rate of time preference is given by a) the slope of the budget constraint. b) the slope of the indifference curves. c) the real rate of interest. d) the slope of the 45° line. 3. According to Keynes, the...
In a simple economy (assume there are no taxes, thus Y is disposable income). the consumption function is: C = 200 +0.75Y. Investment is equal to 300. In this economy, equilibrium GDP is $ (Round your answer to the nearest dollar.) Planned Real Consumption and Investment 400 0 400 300 1200 1800 2000 2400 2800 Real GDP per Year
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