2. Consider the following data table for a hypothetical economy. Aggregate Consumption Personal &n
2. Consider the following data table for a hypothetical economy.
Aggregate Consumption Personal Planned Aggregate Aggregate
Income Expenditure Saving Investment Expenditure Equilibrium
0 100 20
100 180
200 260
300 340
400 420
500 500
600 580
700 660
- Complete the table
- Calculate and interpret MPC and MPS
- Write the equation of Consumption Function
- Determine the equilibrium level of Aggregate Income, Consumption Expenditure, and Personal Saving
- Calculate the Multiplier
- Calculate the change in Aggregate Income when Planned Investment increases by 10.
Please help and thank you for your time.
Homework Answers
Marginal Propensity to
Consume(MPC) is the proportion of additional income going to
consumption expenditure.It is the ratio between the change in
consumption and change in income.
Marginal Propensity to Save(MPS) is the proportion of additional
income that goes to saving.It is measured as the ratio between
change in saving and change in income.
Hence the equilibrium level of
income is 600.
Equilibrium level of:
Consumption expenditure is 580.
Personal saving is 600-580=20.
Investment Multiplier refers
to the 'number of times by which the increase in output/income
exceeds the increase in investment'.It is measured as the ratio
between change in income and change in investment.
Add Answer to:
2. Consider the following data table for a hypothetical
economy.
Aggregate
Consumption
Personal
&n
1. Refer the table below and answer the questions that follow. (4 Points) Aggregate Aggregate Aggregate...
1. Refer the table below and answer the questions that follow. (4 Points) Aggregate Aggregate Aggregate Planned Output Consumption Saving Investment ($ million) Y ($ million) ($ million) ($ million) Aggregate Expenditure AE=C+ 1,500 700 2,000 2,400 2,800 1,800 700 2,100 700 3,200 2,400 700 3,600 2,700 700 a. Fill in the table and find the equilibrium income. b. Find the MPC, MPS and the multiplier. c. If the planned investment increases by $100 million find the new equilibrium level...
Consider the following information on aggregate income, consumption expenditure, and planned investment for a country: nu,...
Consider the following information on aggregate income, consumption expenditure, and planned investment for a country: nu, no Aggregate Output/income $1,800 2,000 2200 2,400 2,600 2.800 3,000 3.200 Consumption $1,800 1,950 2,100 2.250 2.400 2.550 2,700 2.850 Planned Investment $200 200 200 200 200 200 200 nud indo jes, ced roduc When aggregate income is $3,000, O A. saving is $40 and unplanned investment (inventory change) is $100. OB. saving is $300 and unplanned investment (inventory change) is $100. OC. saving...
Year The accompanying table presents hypothetical data on aggregate consumption expenditure and disposable income in millions...
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answer 1,2 and 3 EXERCISES the data in Table 10.1, determine the economic equilibrium for a...
answer 1,2 and 3
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hestion Completion Status: QUESTION Consider a private, closed economy where aggregate consumption C depends on aggregate...
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The following table shows the relationship between aggregate planned expenditure and real GOP in the hypothetical...
The following table shows the relationship between aggregate planned expenditure and real GOP in the hypothetical economy of Econoworld Real GDP bbons of 2007 dollars) Aggregate planned expenditure (billions of 2007 dollars) 100 200 300 420 1131 The level GPS 580 740 Ол ееn O Canadians' Wealth Rises Canadian net saving in the first quarter of 2017 was 522 billion Holdings of financial assets increased by 5162 bilion and the value of shares in corporations increased by $113 billion Explain...
Consider the following table showing aggregate consumption expenditures and disposable income. All values are expressed in...
Consider the following table showing aggregate consumption expenditures and disposable income. All values are expressed in billions of constant dollars. a. Compute desired saving at each level of disposable income. (Round your responses to the nearest whole number.) 50- Disposable Income (Y) Desired Consumption (C) NUL Savings 100 200 300 400 5 0 600 700 800 100 180 Savings (5) -50/ 260 100 200 300 400 500 600 340 420 500 580 Click the graph, choose a tool in the...
Table 27.3.1 The following table shows the relationship between aggregate planned expenditure and real GDP in...
Table 27.3.1 The following table shows the relationship between aggregate planned expenditure and real GDP in the hypothetical economy of Econoworld. Real GDP (billions of 2007 dollars) Aggregate planned expenditure (billions of 2007 dollars) 100 260 420 580 740 200 400 600 800 18) Refer to Table 27.3.1. If investment increases by $25 billion, the real GDP becomes A) $525 billion. B) $625 billion. C) $725 billion D) $600 billion. E) $675 billion.
1. Refer the table below and answer the questions that follow. (4 Points) Aggregate Aggregate Aggregate Planned Output Consumption Saving Investment ($ million) Y ($ million) ($ million) ($ million) Aggregate Expenditure AE=C+ 1,500 700 2,000 2,400 2,800 1,800 700 2,100 700 3,200 2,400 700 3,600 2,700 700 a. Fill in the table and find the equilibrium income. b. Find the MPC, MPS and the multiplier. c. If the planned investment increases by $100 million find the new equilibrium level...
Consider the following information on aggregate income, consumption expenditure, and planned investment for a country: nu, no Aggregate Output/income $1,800 2,000 2200 2,400 2,600 2.800 3,000 3.200 Consumption $1,800 1,950 2,100 2.250 2.400 2.550 2,700 2.850 Planned Investment $200 200 200 200 200 200 200 nud indo jes, ced roduc When aggregate income is $3,000, O A. saving is $40 and unplanned investment (inventory change) is $100. OB. saving is $300 and unplanned investment (inventory change) is $100. OC. saving...
Year The accompanying table presents hypothetical data on aggregate consumption expenditure and disposable income in millions of dollars over five years. Disposable income (in millions) Consumption expenditure (in millions) 175 2013 200 2014 225 2015 280 193.75 235 268.75 250 2016 325 2017 300 a. What is the marginal propensity to consume (MPC)? MPC: b. What is the marginal propensity to save (MPS)? MPS:
answer 1,2 and 3
EXERCISES the data in Table 10.1, determine the economic equilibrium for a government spending 1. Using the data in level of 60. 2. Using Table 10.1 and multiplier, calcu 3. Go to the Table 10.1 and the formulas and numbers given in the text for the multiplier and tax einlier, calculate the effect on equilibrium GDP of a government spending level of 100 ined with a tax level of 100. What does this imply about the...
hestion Completion Status: QUESTION Consider a private, closed economy where aggregate consumption C depends on aggregate income Y according to the equation C. 15 0.5 Y. where planned investment is IP - 15. Using the above information, complete the following table: Y c R AER_ where AEP stands for aggregate expenditure planned. 1) Suppose that the GDP initially is Y 50. Obtain the corresponding levels of savings S and unplanned investment Is Y = 40 an income. expenditure equilibrium? If...
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The following table shows the relationship between aggregate planned expenditure and real GOP in the hypothetical economy of Econoworld Real GDP bbons of 2007 dollars) Aggregate planned expenditure (billions of 2007 dollars) 100 200 300 420 1131 The level GPS 580 740 Ол ееn O Canadians' Wealth Rises Canadian net saving in the first quarter of 2017 was 522 billion Holdings of financial assets increased by 5162 bilion and the value of shares in corporations increased by $113 billion Explain...
Consider the following table showing aggregate consumption expenditures and disposable income. All values are expressed in billions of constant dollars. a. Compute desired saving at each level of disposable income. (Round your responses to the nearest whole number.) 50- Disposable Income (Y) Desired Consumption (C) NUL Savings 100 200 300 400 5 0 600 700 800 100 180 Savings (5) -50/ 260 100 200 300 400 500 600 340 420 500 580 Click the graph, choose a tool in the...
Table 27.3.1 The following table shows the relationship between aggregate planned expenditure and real GDP in the hypothetical economy of Econoworld. Real GDP (billions of 2007 dollars) Aggregate planned expenditure (billions of 2007 dollars) 100 260 420 580 740 200 400 600 800 18) Refer to Table 27.3.1. If investment increases by $25 billion, the real GDP becomes A) $525 billion. B) $625 billion. C) $725 billion D) $600 billion. E) $675 billion.
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