Why is anticipation a good thing during inflation? How does a change in disposable income affect...
- Why is anticipation a good thing during inflation?
- How does a change in disposable income affect the consumption schedule?
- If MPS is .2 and the change in disposable income is $400. What is the change in savings?
- Draw the consumption graph.
- What can cause the consumption and savings schedules to shift?
- What is the break-even point?
- How are the real interest rate and the level of investment related?
Homework Answers
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Why is anticipation a good thing during inflation?
How does a change in disposable income affect...
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...
A,B,C,D Given this information, answer the following questions: A) How much will consumption increase if disposable...
A,B,C,D
Given this information, answer the following questions: A) How much will consumption increase if disposable income increases by $400? Show your work. B) Suppose there is a decrease in investment of S1,200. What will be the total decrease in Real GDP caused by this decrease in investment? Show your work. C) If autonomous consumption is S100, write the consumption function of this economy. D) If the economy's savings rate decreases, how will this most likely affect the MPC (increase,...
Income (Yd) Consumption Expenditure Saving Investment Expenditure Government Expenditure Net Export Expenditure Aggregate Expenditure $8000...
Income (Yd) Consumption Expenditure Saving Investment Expenditure Government Expenditure Net Export Expenditure Aggregate Expenditure $8000 $11,000 $2,500 $5,000 $12,500 12,000 14,000 2,500 5,000 12,500 20,000 20,000 2,500 5,000 12,500 30,000 27,500 2,500 5,000 12,500 50,000 42,500 2,500 5,000 12,500 100,000 80,000 2,500 5,000 12,500 Calculate savings, MPC, MPS, break even income, and the equilibrium level of income (Y = AE = C + I + G +NX) in the above given information. Draw a graph showing disposable income (Yd)...
The net export function illustrates that:A) net exports are a positive function of domestic income....
The net export function illustrates that:A) net exports are a positive function of domestic income.B) net exports are independent of domestic income.C) net exports are a negative function of domestic income.D) imports are independent of domestic income.E) exports are independent of foreign income. Suppose the marginal propensity to import for country A is 0.4. Calculate the change in total value of imports of the country if national income increases by $100,000.A) $16,000B) $20,000C) $60,000D) $40,000E) $25,000 An MPI of 0.4 indicates that...
2. Practice with the Keynesian model-graphs Show using a graph how the following shocks would affect...
2. Practice with the Keynesian model-graphs Show using a graph how the following shocks would affect equilibrium output. (Which parameters in the Keynesian model change? How does that shift the expenditure schedule? What happens to output as a result?) (a) Consumer confidence declines (b) The stock market booms (c) A decline in interest rates increases both consumption and investment demand
I don't know how to solve (e) 1. The AE diagram below shows the consumption function...
I don't know how to solve (e)
1. The AE diagram below shows the consumption function of an economy, Each box is $20x$20 Distance between 45 degree line and consumtion curve is equal to saving, Distance between 45 degree line and AE curve is equal to unplanned inventory change. 45° (a) What are the MPC, MPS, and multiplier? **** (b) What are the savings when Y=200, 400, 600? 160+ 1001 100 400 (c) What are the consumption function and saving...
question #3 a,b,c,d,e I am confused thankyou pically TISS. level of out rate, or the inflation...
question #3 a,b,c,d,e
I am confused thankyou
pically TISS. level of out rate, or the inflation rate? lowing typic employment rate uring the 1930s w the Grear Great Depression differ? the nodel laid out in Who spends? Who saves? we? Who is the definition of a iffer from measured GDP? 11, List five factors, aside from the level of in level of output, the that can affect the level of consumption macroeconomy. how did economists' opinions 2 12. Why isn't...
Consider the two-sector edogenous growth model Y = F[K, (1− u)LE] = K0.3[(1 − u)LE]0.7 Output...
Consider the two-sector edogenous growth model Y = F[K, (1− u)LE] = K0.3[(1 − u)LE]0.7 Output per effective worker is y = f(k, 1 − u) = k0.3(1 − u)0.7 (3 points) In this economy, with a depreciation rate of 13%, a population growth rate of 2%, and technological growth rate of g(u), what is the break-even investment (the amount of investment needed to keep capital per effective worker constant)? (7 points) Write down the equation of motion for k...
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...
A,B,C,D
Given this information, answer the following questions: A) How much will consumption increase if disposable income increases by $400? Show your work. B) Suppose there is a decrease in investment of S1,200. What will be the total decrease in Real GDP caused by this decrease in investment? Show your work. C) If autonomous consumption is S100, write the consumption function of this economy. D) If the economy's savings rate decreases, how will this most likely affect the MPC (increase,...
2. Practice with the Keynesian model-graphs Show using a graph how the following shocks would affect equilibrium output. (Which parameters in the Keynesian model change? How does that shift the expenditure schedule? What happens to output as a result?) (a) Consumer confidence declines (b) The stock market booms (c) A decline in interest rates increases both consumption and investment demand
I don't know how to solve (e)
1. The AE diagram below shows the consumption function of an economy, Each box is $20x$20 Distance between 45 degree line and consumtion curve is equal to saving, Distance between 45 degree line and AE curve is equal to unplanned inventory change. 45° (a) What are the MPC, MPS, and multiplier? **** (b) What are the savings when Y=200, 400, 600? 160+ 1001 100 400 (c) What are the consumption function and saving...
question #3 a,b,c,d,e
I am confused thankyou
pically TISS. level of out rate, or the inflation rate? lowing typic employment rate uring the 1930s w the Grear Great Depression differ? the nodel laid out in Who spends? Who saves? we? Who is the definition of a iffer from measured GDP? 11, List five factors, aside from the level of in level of output, the that can affect the level of consumption macroeconomy. how did economists' opinions 2 12. Why isn't...
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