Refer to the information provided in Table 8.1 below
to answer the questions that follow.
Table 8.1
1) Refer to Table 8.1. Society's MPC is
a) 0.80.
b) 0.05.
c) 0.90.
d) 0.95.
2) Refer to Table 8.1. Society's MPS is
a) 0.05.
b) 0.10.
c) 0.95.
d) 0.20.
3) Refer to Table 8.1. At an aggregate income level of $100, aggregate saving would be
a) -$70.
b) $70.
c) $50.
d) -$30.
Refer to the information provided in Figure 8.3
below to answer the questions that follow.
Figure 8.3
4) Refer to Figure 8.3. If aggregate income is $1,000 billion, then
in this society aggregate saving is ________ billion.
a) $240
b) $320
c) $550
d) $300
5) Refer to Figure 8.3. [60 + 0.7Y] is this society's
a) consumption function.
b) MPC.
c) MPS.
d) saving function.
Q1
Answer
MPC=change in consumption /change in income
= (125-80)/ (50-0)
=0.9
The MPC is 0.9
Option c
==============
Q2
Answer
Option b
MPS=1-MPC=1-0.9=0.1
=========
Q3
Answer
Saving =income -consumption
=100-170=-$70
Option a
=======
Q4
Answer
MPC= (130-60)/ (100-0)
=0.7=b
a=autonomous consumption=60=y-axis intercept of the consumption function which is the dark black line
Consumption function is the form of
C=a+bY
C=60+0.7Y
Y=1000
C=60+0.7*1000=760
S=Y-C=1000-760=$240
The saving is $240
Option a
=========
Q5
Answer
Option a
MPC= (130-60)/ (100-0)
=0.7=b
a=autonomous consumption=60=y-axis intercept of the consumption function which is the dark black line
The consumption function is the form of
C=a+bY
C=60+0.7Y
Refer to the information provided in Table 8.1 below to answer the questions that follow. Table 8.1 1) Refer to Tab...
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