6. We are given the following information about the levels of disposable income and savings:
Disposable Income |
Consumption |
Savings |
APC |
APS |
MPC |
MPS |
$2400 |
$-80 |
--- |
--- |
|||
2600 |
-40 |
|||||
2800 |
0 |
|||||
3000 |
40 |
|||||
3200 |
80 |
|||||
3400 |
120 |
|||||
3600 |
160 |
|||||
3800 |
200 |
|||||
4000 |
240 |
Q) C = 400 + 0.8(Yd)
Yd= $5000
a) C = 400 + 0.8(Yd)
Putting the value of disposable income in the above equation,
C = 400 + 0.8(5000)
= 400 + 4000
= $4400 is the answer.
So, the current level of consumption is $4400.
b) Savings = Disposable income - Consumption
= 5000 - 4400
= $600 is the answer.
So, the current level of savings is $600.
c) C = 400 + 0.8(Yd)
MPC is calculated by differentiating the consumption function with respect to disposable income as it measures the change in consumption due to a given change in income.
So, differentiating the consumption function with respect to disposable income,
MPC = dC / dYd = C / Yd = 0.8 is the answer.
MPC + MPS = 1
0.8 + MPS = 1
MPS = 1 - 0.8 = 0.2 is the answer.
d) APC = consumption / disposable income
= 4400 / 5000
= 0.88 is the answer.
APC + APS = 1
0.88 + APS = 1
APS = 1 - 0.88 = 0.12 is the answer.
The consumption function is given by the equation: C = 400 + 0.8(Yd) where C =...
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need answer QUESTION 24 Given the table below which of the following statements is TRUE? Consumption Savings MPC MPS APC APS Level of output 240 -4 260 0 280 4 300 8 320 12 340 16 360 20 380 24 400 28 A. Equilibrium is obtained when the level of output is 280 O B. When the level of output is 320 APS is equal to 0.375 OC. When the level of output is 360 APC is 0,94 OD When...
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. 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....
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