Answer
a)
Y=100
C=400+0.6*Y=400+0.6*100=$460
the consumption is $460
Y=1200
C=400+0.6*Y=400+0.6*1200=$1120
the consumption is $1120
Y=3000
C=400+0.6*Y=400+0.6*3000=$2200
the consumption is $2200
b)
MPC=marginal propensity to consume =coefficient of Y in the consuption funtion =0.6
MPS=1-MPC=1-0.6=0.4
22. Given: C = 400 + 6(Y) a. Calculate Cify - $100....if Y-S1200?...if Y-$3000? b. Calculate...
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18. Given: C = 500 + 75(Y) a. Calculate Cif Y = $100....if Y = $1200?...if Y = $3000? b. Calculate the MPC. Calculate the MPS.
The consumption function is given by the equation: C = 400 + 0.8(Yd) where C = consumption and Yd = disposable income. Currently, the level of disposable income is $5000. What is the current level of consumption? What is the current level of saving? What is the MPC? What is the MPS? Calculate the APC and the APS. 6. We are given the following information about the levels of disposable income and savings: Disposable Income Consumption Savings APC APS MPC...
QUESTION 18 $500 T 400 300 C+ 200 100 $100 200 300 400500 Real GDP Refer to the diagram for a private closed economy. At the equilibrium level of GDP, the APC and APS are 5/6 and 1/6, respectively. are 4/5 and 1/5, respectively. are equal to the MPC and MPS, respectively. cannot be determined from the information given.
3. You are given the following MPC’s, for each one calculate (show work) the MPS and the Multiplier a. MPC = .80 B. MPC = .40 c. MPC = .67 D. MPC = .33 4. You are given the following MPS’s, for each one calculate (show work) the MPC and the Multiplier a. MPS = .50 B. MPS = .75 c. MPS = .30 D. MPS = .25 5. If the multiplier was equal to 2.50, explain what impact the...
Econ 2)1 Given the following figures, calculate savings, MPC, MPS, and Multiplier (20 points) 1. C S MPC MPS APC APS GDP 325 320
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22. Given the MPC = 75, the initial equilibrium = $20,000, and the target Y= $25,000. a. Calculate the spending multiplier. Calculate the tax multiplier. b. By how much would G have to be increased to reach the target Y? c. By how much would T have to be decreased to reach the target Y? 23. True or False AND explain why: a. If G > T, the government budget is in a deficit. b. A tax cut will...
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...
1.Suppose that the MPC is equal to 0.8 and autonomous consumption spending is 400. Then the consumption function is given bya.C = 400 - 0.8Ydb.C = -400 + 0.2Ydc.C = 320 x Ydd.C = 400 + 0.8Yde.C = 400 + 0.2Yd2.Suppose that the MPC is equal to 0.8 and autonomous consumption spending is 400. At what level of income is saving = 0?a.400b.500c.2000d.320e.12003.The saving functiona.. is an upward-sloping straight line with a vertical intercept of -C0 and a slope of...
. YOU ARE GIVEN THE FOLLOWING INFORMATION ABOUT THE ECONOMY OF ENGLAND. PLEASE ANSWER QUESTIONS A THROUGH C AND SHOW ALL WORK AND CALCULATIONS BELOVW DISPOSABLE INCOME CONSUMPTION (BILLIONS OF DOLLARS PER YEAR) $200 $100 S20 S30 $40 S360 $440 S520 A CALCULATE THE MARGINAL PROPENSITY TO CONSUME(MPC) AT EACH LEVEL OF DISPOSABLE INCOME AND CONSUMPTION LEVEL. INTERPET WHAT THE MPC NUMBER YO CALCULATED MEANS TO YO B. CALCULATE SAVINGS AT EACH LEVEL OF DISPOSABLE INCOME AND CONSUMPTION LEVEL. c....
a) If the saving function is given by S° = 0.03Y^2 - 2Y + 150Calculate the values of marginal propensity to save (MPS) and marginal propensity to consume (MPC) when Y=40.