1. Suppose that the MPC is equal to 0.8 and autonomous consumption spending is 400. Then the consumption function is given by a. C = 400 - 0.8Yd b. C = -400 + 0.2Yd c. C = 320 x Yd d. C = 400 + 0.8Yd e. C = 400 + 0.2Yd 2. Suppose th
1.
Suppose that the MPC is equal to 0.8 and autonomous consumption spending is 400. Then the consumption function is given by
| a. | C = 400 - 0.8Yd | |
| b. | C = -400 + 0.2Yd | |
| c. | C = 320 x Yd | |
| d. | C = 400 + 0.8Yd | |
| e. | C = 400 + 0.2Yd |
2.
Suppose that the MPC is equal to 0.8 and autonomous consumption
spending is 400. At what level of income is saving = 0?
| a. | 400 | |
| b. | 500 | |
| c. | 2000 | |
| d. | 320 | |
| e. | 1200 |
3.
The saving function
| a. | . is an upward-sloping straight line with a vertical intercept of -C0 and a slope of (1 - b). | |
| b. | shows that in some ranges of income saving may be negative. | |
| c. | is given by the equation S = -C0 + (1 - b)Yd | |
| d. | can be derived from the consumption function. | |
| e. | all of the above |
Homework Answers
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1. Suppose that the MPC is equal to 0.8 and autonomous consumption spending is 400. Then the consumption function is given by a. C = 400 - 0.8Yd b. C = -400 + 0.2Yd c. C = 320 x Yd d. C = 400 + 0.8Yd e. C = 400 + 0.2Yd 2. Suppose th
The consumption function is given by the equation: C = 400 + 0.8(Yd) where C =...
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The following data for an imaginary economy. MPC = b = 0.8 , autonomous consumption =...
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QUESTION 13 and autonomous If the consumption function is: C = 0.68(Disposable Income) + 400, the MPC- consumption...
QUESTION 13 and autonomous If the consumption function is: C = 0.68(Disposable Income) + 400, the MPC- consumption -
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B,c,d,e please solve Suppose in the economy autonomous consumption - $100, autonomous investmen $120, government purchases...
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...
If the MPC in an economy equals 0.8, and disposable income falls by $100, consumption spending...
If the MPC in an economy equals 0.8, and disposable income falls by $100, consumption spending will fall by _____. A. $8.00 B. $0.80 C. $80 D. $20 E. $500
the consumption function for an economy is C# 180 + 75 Yd (disposable Income) and spending...
the consumption function for an economy is C# 180 + 75 Yd (disposable Income) and spending increases by $800, then the resulting change in national income is a +$2,800 b. 5-3,200 OC $2,800 d. $+3,200 1 points Save Answer QUESTION 5 Assume the actual GOP IS $4800 and the potential GOP is $4400. The economy's MPC is.75. What should the government do to eliminate the gap? a. raise taxes by $100 b. cut taxes by $75 c. increase government spending...
Assume that Miriam’s consumption function is C = a + b(Y d), where Y d =...
Assume that Miriam’s consumption function is C = a + b(Y d),
where Y d = (Y − T ) is disposable income, defined as the
difference between income Y and taxes T. You observed that, after
an increase in taxes T by $80, Miriam’s consumption C decreased by
$60. If Miriam’s income (Y ) did not change, you can deduce that
her marginal propensity to consume (MPC) is
23. Assume that Miriam's consumption function is C = a +b(yd),...
QUESTION 13 and autonomous If the consumption function is: C = 0.68(Disposable Income) + 400, the MPC- consumption -
Suppose the marginal propensity to consume if 0.75 and autonomous consumption (consumption at zero income) is $4,000. If income is $50,000, consumption spending is a. $37,500 b. $41,500 C. $45,500 d. $54,000 QUESTION 4 If the consumption function for an economy is C = 180 + 75 Yd (disposable income) and spending increases by $800, then the resulting change in national income is a. +$2,800 OOO b. 5-3,200 c. $-2,800 d. $+3,200 QUESTION 5 Assume the actual GDP is $4800...
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...
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...
the consumption function for an economy is C# 180 + 75 Yd (disposable Income) and spending increases by $800, then the resulting change in national income is a +$2,800 b. 5-3,200 OC $2,800 d. $+3,200 1 points Save Answer QUESTION 5 Assume the actual GOP IS $4800 and the potential GOP is $4400. The economy's MPC is.75. What should the government do to eliminate the gap? a. raise taxes by $100 b. cut taxes by $75 c. increase government spending...
Assume that Miriam’s consumption function is C = a + b(Y d),
where Y d = (Y − T ) is disposable income, defined as the
difference between income Y and taxes T. You observed that, after
an increase in taxes T by $80, Miriam’s consumption C decreased by
$60. If Miriam’s income (Y ) did not change, you can deduce that
her marginal propensity to consume (MPC) is
23. Assume that Miriam's consumption function is C = a +b(yd),...
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