1. Prepare a comparative table of the following concepts:
a. Average Propensity to Consume
b. Average propensity to save
APC:
1.) APC = consumption divided by income = C / Y
APC is slope of consumption function
APC can be greater than one , equal to one or less than one.
APC is always positive , can't be negative
APC falls as income rises.
APS:
1.) APS = saving / income = S/Y
S = Y-C , so APS = 1- APC, or APC + APS= 1
APS is slope of saving function
APS can't be greater than one or equal to one., It's always less than one
APS can be negative
APS rises with rise in income.
As APS rises, APC falls
1. Prepare a comparative table of the following concepts: a. Average Propensity to Consume b. Average...
Based on the data below, calculate the Average Propensity to Consume at a disposable income of $500 Aggregate Disposable Income Consumption $ billions) $ billions) so $80 $100 $200 $300 $400 $500 $160 $220 $300 $380 $460 0.80 O$80 0.08 0.92 2.5 pts D Question 31 If disposable income increases from $450 to $470 bi propensity to save (MPS)? llion and savings increases from $15 to $20 billion, what is the marginal 0.25 0.02
True;False or Uncertain
A1 In Canada, as well as other countries, the average propensity to consume (the ratio of consumption to disposable income) has been fairly constant over time, while cross-sectional information shows that richer households tend to save more as their income rise. These phenomena cannot be explained with our available models.
Marginal Propensity to Marginal Propensity to Consume (MPC) Save (MPS) Multiplier (m) 0.92 10 0.85 0.20 23). a). In the above table, what is the value of the marginal propensity to consume MPC) that correctly fills in blank (G) and the value of the income multiplier that correctly fills in blank (H)? Page 9 b)When the MPC increases, the income/spending multiplier (increases or decreas es). If MPC decreases? 17)Draw an AD and SRAS graph and label the axis, lines and...
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.
According to the table, the value of the marginal propensity to consume is Income Consumption $1,000 $900 $2,000 $1,700 $3,000 $2,500 $4,000 $3.300 $5,000 $4,100 0.8 O 0.7 0.9. 0.6. 0.5. D Question 26 1 pts Injecting new money into the economy eventually causes O stagflation. O unemployment. O arecession. inflation. deflation.
According to the table, the value of the marginal propensity to consume is Income Consumption $1,000 $900 $2,000 $1,700 $3,000 $2,500 $4,000 $3.300 $5,000 $4,100 0.8 O 0.7...
Consider two economies, A and B. Economy A has a marginal propensity to consume of 0.9, a net tax rate of 0.3 and a marginal propensity to import of 0.3. Economy B has a marginal propensity to consume of 0.9, a net tax rate of 0.1 and a marginal propensity to import of 0.3. Suppose there is an increase in autonomous investment of $5 billion in each of these economies. Which of the following statements is true? Group of answer...
4. The marginal propensity to consume is the: a) amount consumed out of an additional dollar of income. b) ratio of consumption to income. c) amount available for consumption after precautionary saving. d) ratio of consumption to wealth. 5. According to the life cycle hypothesis, if a consumer wants equal consumption in every year, and the interest rate is 0, there are 40 years until retirement, and 60 years of life remaining, then the marginal propensity to consume out of...
1. Describe the marginal propensity to consume and show how it is computed.
If the marginal propensity to consume (MPC) increases... A. The MPS increases B. The multiplier decreases C. MPC +MPS is less than 1 D. THe multiplier increases
is to Complete the following table which depicts a hypothetical economy in which the marginal propensity to save is constant at all levels of real GDP investment spending is autonomous, and there is no government. Note: Enter whole numbers and use the minus sign where needed. Real GDP Consumption Investment Saving $ - 500 $0 2000 4000 6000 8000 10000 $500 2000 3500 5000 6500 8000 $1500 1500 1500 1500 500 1000 1500 2000 1500 1500 This economy's marginal propensity...