Homework Answers
As per rules and time constraint only one question is allowed. However questions are small so I am answering first three. Kindly ask other questions separately. Thank you.
1) GDP deflator is considered as the broadest based price index as it measures overall price change in an economy.
Option a.
2) MPC or marginal propensity to consume is marginal consumption divided by marginal income. It measures change in consumer spending with change in income.
Option a.
3) Marginal propensity to save is the change in savings with change in income.
Also, MPS + MPC = 1 or
1 - MPC = MPS
Option a.
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The broadest-based price index available is the A) GDP deflator. B) producer price index. C) consumer...
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The broadest-based price index available is the A) GDP deflator. B) producer price index. C) consumer price index. D) wholesale price index.
The MPC is A) the change in consumption divided by the change in income. B) consumption divided by income. C) the change in consumption divided by the change in saving. D) the change in saving divided by the change in income. The MPS is A) the change in saving divided by the change in income. B) 1 + MPC C) income divided by saving. D) total saving divided by total income Saving equals A) Y-C. B) Y - planned 1....
If you earn additional $500 in disposable income one week for painting your neighbor's house A) the total of your consumption and saving will increase by more than $500. B) the total of your consumption and saving will increase by $500. C) the total of your consumption and saving will increase by less than $500. D) your consumption will increase by more than $500, even if your MPS is 0.1.
d. leaves both the GDP deflator and the consumer price index unchanged. 23. In a closed economy, national saving is a. usually greater than investment. b. equal to investment. d. usually less than investment because of the leakage of taxes. c. always less than investment.
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