1. Describe the marginal propensity to consume and show how it is computed.
1. Describe the marginal propensity to consume and show how it is computed.
Homework Answers
The marginal propensity to consume is equal to ΔC / ΔY, where ΔC is the change in consumption, and ΔY is the change in income. If consumption increases by 80 cents for each additional dollar of income, then MPC is equal to 0.8 / 1 = 0.8. Suppose you receive a $500 bonus on top of your normal annual earnings.
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1. Describe the marginal propensity to consume and show how it
is computed.
what is the value of the multiplier if the marginal propensity to consume is 0.5? Show...
what is the value of the multiplier if the marginal propensity to consume is 0.5? Show your work
. The marginal propensity to consume in a city is 0.7 and the marginal propensity to...
. The marginal propensity to consume in a city is 0.7 and the marginal propensity to import is 0.1. A team proposes a new stadium construction project that will generate $6 million in spending. A. Using multiplier effects, how much will the project generate in total? B. Why is it likely that the actual increase in new income will be much smaller?
Q. How do the marginal propensity to consume, the marginal propensity to import and the income tax ratio influence the m...
Q. How do the marginal propensity to consume, the marginal propensity to import and the income tax ratio influence the multiplier? How do fluctuation in autonomous expenditure influence real GDP?
What are the marginal propensity to consume and marginal propensity to save and the multiplier? What...
What are the marginal propensity to consume and marginal propensity to save and the multiplier? What is that money is neutral in the long run but not in the short run?
If marginal propensity to consume falls. How does this affect the Keynesian cross model? Then how...
If marginal propensity to consume falls. How does this affect the Keynesian cross model? Then how does it affect the IS Curve?
The marginal propensity to consume is 0.7. How would an initial spending of $1200 affect the...
The marginal propensity to consume is 0.7. How would an initial spending of $1200 affect the GDP?
25. Suppose the marginal propensity to consume is 0.63, the marginal propensity to import equals 0.08,...
25. Suppose the marginal propensity to consume is 0.63, the marginal propensity to import equals 0.08, and personal income taxes amount to 9 percent of GDP. The spending multiplier for this economy is equal to _____. a. 0.54 b. 0.80 c. 1.25 d. 1.41 e. 1.85
Suppose that the marginal propensity to consume if.6 and that there is an increase in government...
Suppose that the marginal propensity to consume if.6 and that there is an increase in government expenditure of 5. a) According to the Keynesian cross model, what is the change in output that results from this policy change? b) Describe the graphical impact that this change will have on the Keynesian cross model c) Why is the change in output different from the change in government expenditure? Explain how this process works intuitively.
The multiplier is equal to Multiple Choice Ο 1- Marginal propensity to save Ο Marginal propensity...
The multiplier is equal to Multiple Choice Ο 1- Marginal propensity to save Ο Marginal propensity to save + Marginal propenstyto consume Ο C) 1. Marginal propensity to save. Ο C) 1 - Marginal propensity to consume.
Calculate the values of marginal propensity to save (MPS) and marginal propensity to consume (MPC) when Y=40.
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.
Suppose that the marginal propensity to consume if.6 and that there is an increase in government expenditure of 5. a) According to the Keynesian cross model, what is the change in output that results from this policy change? b) Describe the graphical impact that this change will have on the Keynesian cross model c) Why is the change in output different from the change in government expenditure? Explain how this process works intuitively.
The multiplier is equal to Multiple Choice Ο 1- Marginal propensity to save Ο Marginal propensity to save + Marginal propenstyto consume Ο C) 1. Marginal propensity to save. Ο C) 1 - Marginal propensity to consume.
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