8. Assume that the consumption function is C= 564 +0.66(Y - T), Y is 6679, and T = 264 +0.58Y.C then equals O 3252.19 O 2241.18 O 3489.93 O 3489.07
Q: In Figure 7.2, if the consumption function is C=100+0.75Y, then: O the savings function is…
A: Relationship between Income (Y), consumption (C) and saving (S) Y = C + S Where Y is income C is…
Q: Figure 7.2 45° C, S Y=200 In Figure 7.2, if income is $200, then: consumption is also $200. saving…
A: The consumption function shows the functional association between the gross national income and…
Q: Given the consumption function C = $758 + 0.65 x Y, an increase in disposable income from %3D $7,640…
A: Given: C=758+0.65Y Old income level=$7640 New income level=$9080 To find: Increase in savings
Q: Assume Peter's preferences over time (periods are yearly) are given by U(c1, C2, C3, C4, -...) =…
A: The utility function is a key concept in economics that quantifies preferences across a range of…
Q: Suppose that the economy of the United States has an investment schedule that is reflected in the…
A: There is an inverse relationship between planned real investment and the annual rate of interest.…
Q: 12. What is the saving function associated with the following consumption function: C = 30 + 0.7DI ?…
A: Devaluation is basically decreasing the value of your own currency.
Q: Suppose you are given the following information: Profit Margin (%): 13 Asset Turnover: 0.3 Equity…
A: Given, Profit margin % = 13 Asset turnover = 0.3 Equity multiplier = 0.8
Q: Suppose disposable income increases from $7 trillion to $8 trillion. At the same time, consumption…
A: Disposable income: It is that portion of an individual’s overall income over which the recipient of…
Q: The following are effects connected to the trend of Financialization of the economy, EXCEPT: O…
A: Financialisation of the economy refers to the progress and advancement of the financial sector of…
Q: 69. Consider the following consumption function C = 1100 + 0.6Yd What is the simple multiplier? O a.…
A: The formula for the multiplier is as follows : Multiplier = 1 / 1 - MPC
Q: 6. Given the following Cobb-Douglas production function for Jordan Economy. Y = AK^0.7 L^0.3. What…
A: Cobb-Douglas production function for Jordan Economy; Y1=AK0.7L0.3 Increase in capital stock= 10%…
Q: Disposable Income Consumption $400 500 800 1,000 1,200 1,500 1,600 2,000 2,000 2,500 2,400 3,000…
A: Disposable income: Disposable income is the total income that is available to an individual for…
Q: Elijah has a utility function U(c1, c2) = min{c1, c2}, where cl and c2 are his consumption in…
A: Consumer can either save or spend his income. When the consumer saves he increases his future…
Q: Maria runs a catering business from her home. All of the food for her business is prepared in her…
A: Net investment is gross investment adjusted for depreciation of the capital stock.
Q: If the consumption function lies above the 45-degree line, then saving at thes levels of disposable…
A: When there is a savings in the economy, then the consumption function lies below the 45' line. The…
Q: QUESTION 1 If MPC=0.75 (and there are no income taxes) and if government purchases fall by 45, then…
A: The changes in the autonomous spending affect the output through the multiplier effects. The changes…
Q: . Given the consumption function, C=0-75 Y and the investment function, I 110-0:25 i, then the…
A:
Q: What are profits? O total money taken in by a corporation O difference between revenues (the amount…
A: Stock price is defined as the minimum amount of money that an individual must contribute to become…
Q: O If the market interest rate (i) increases today, the Price of a Bond (P) today will decline. The…
A: The coupon bonds are the bonds in which the interest rate that the bonds pays to the holders will be…
Q: A household that is a net saver owes less money to its creditors than it has saved or has lent out…
A: The amount that is charged by the lender on any principal amount that is being borrowed by a…
Q: (all data in real $ bn). On the graph below YO= 1782, Y1= 1868 and Y2 = 2018. If the initial…
A: Given: Y0=1782 Y1=1868 Y2=2018 Change in A=60
Q: If Wanda's income is reduced to zero after she loses her job, her consumption will be and her saving…
A: Every individual needs to consume in order to survive. Hence even if an individual's income is zero,…
Q: Derive the saving function and the consumption function. O A. S= - 800-0.25Y and C= 800 +0.75Y %3D O…
A: Saving function: S = a + bY When Y = 0, S = - 800 (vertical intercept = a), and MPS (b) = 0.25 S = -…
Q: Suppose total disposable income in Country X rises by $500 billion while total saving rises by $80…
A: Disposable income is the measure of cash that an individual or family needs to spend or save after…
Q: Suppose the real interest rate is 0%. Daniel worked for 60 years and he retired for 20 years. When…
A: Savings at retirement=Earning till retirement-Consumption till retirement
Q: If the Marginal Propensity to Consume is 80%, then the Consumption Multiplier is O 8 O 2 O 1.25 O 5…
A: Multiplier show the how much income will multiplied in the economy , so its depend upon the level of…
Q: Refer to problem 2. The slope of the aggregate expenditure function is О .10 О 0.10 O 0.60 O 0.70
A: The aggregate expenditure represents the current market value of all the final goods and services…
Q: Assume in a simple economy that the level of saving is - $800 when aggregate output equals zero and…
A: In the Keynesian theory when the price level in the economy is assumed fixed then the economy…
Q: If the consumption function is of the form [C= 80 + 0.4 Y, the MPS equal: Lütfen birini seçin: O A.…
A: Consumption function given above is of the form C= c+bY ie 80+0.4Y Where c is autonomous consumption…
Q: 11. Assume that an economy's production function is Y= 1,000L/2, so that when the marginal product…
A: When the labor demand and supply curve are equated, the real wages are determined at which the…
Q: 2. If disposable income is 4130, consumption is 2400, government spending is 431, and total taxes…
A: here we calculate the national savings by using the given information and choose the correct option…
Q: 32 14. If consumption function is given by : C= 100 + 0.8Yd , then MPS equal a. 0.8 O b. 8 O c. 2 O…
A: In Keynesian economic theory, the marginal propensity to save (MPS) refers to the proportion of an…
Q: TE 45° TE2=C+I2+G+(X-IM) TE:=C+I+G+(X-IM) AI:100 Y1 If the $100 increase in investment in Figure 9.1…
A: MPC defines how sensitive is the consumption with respect to income level . It is given as : ∆C / ∆…
Q: Drive the is curve mathematically anf graphically when investment function is more sensitive to rate…
A: The IS curve shows the different combinations of interest rate and income where the goods market is…
Q: 14. If consumption function is given by : C= 100 + 0.8Yd , then MPS equal О a. 0.8 O b. 8 O .2 O d.…
A: Consumption is the spending or expense which is incurred for the purpose of utility by the consumer…
Q: Given the consumption function C = $758 + 0.75 x Y, an increase in disposable income from $7,640 to…
A: Marginal propensity to consume (MPC): - it is a fraction of the change in disposable income that is…
Q: Consider the following 2-period model U(C1,C2) = min{3C1,4C2} C1 + S = Y1 – T1 C2 = Y2 – T2 + (1+r)S…
A: Considering the model: C1 +S = Y1-T1C2 = Y2-T2 + (1+r) S Taking the value of S from C2 &…
Q: Suppose two successive levels of disposable personal income are $13.8 and $18.8 billion,…
A: MPC ( marginal propensity to consume) is the share of increased disposable income that spend on…
Q: If the multiplier is 5, what is the MPC? O 0.20 O 0.50
A: The MPC (Marginal Propensity to Consume) is a crucial component of Keynesian macroeconomic theory.…
Q: 5 Suppose y = 6w2x4/z5 . Suppose that w increases 6%, x increases 9% , and z increases 1% . By what…
A: The amount to which a variable gain or loses intensity, magnitude, extent, or value is measured by…
Q: Assume that the consumption function is C O 3252.19 564 +0.66(Y - T), Y is 6679, and T 264 +0.58Y. C…
A: Given, Consumption Function (C) = 564 + 0.66 (Y - T) For finding the value of C, we need to find…
Q: In an economy, autonomous consumption is $10. If Income is $90 and the mpc is 0.9, how much is…
A: Marginal propensity to consume refers to change in consumption with respect to change in income.…
Q: At the beginning of the year, your wealth is €10,000. During the year, you have an income of €90,000…
A: When talking about an individual's wealth, it is said that it is the total amount of assets held by…
Q: If consumers spend of a change in their disposable income, then a tax increase of $100 would lower…
A: The marginal propensity to consume (MPC) is outlined because the proportion of AN mixture raise in…
Q: An increase in disposable income shifts Select one: O a. both the consumption and savings functions…
A: The disposable income refers to the income of the consumer which is left with the consumer after…
Q: 13. If consumption function is given by : C= 100 + 0.8Yd , then MPC еqual O a. 02 O b. 8 O c. 2 O d.…
A: Macroeconomics is the study of the economy as a whole. It explains different aspects such as income,…
Q: Assume in a simple economy that the level of saving is -$800 when aggregate output equals zero and…
A: S = - 800 + 0.25Y C = Y - S = Y + 800 - 0.25Y = 800 + 0.75
Step by step
Solved in 2 steps
- . Given the consumption function, C=0-75 Y and the investment function, I=110-0:25 i, then the equation of the IS function will be : oubonqom (A) Y=110–0-75 i (B) Y=440-i (C) Y=500–0-25 i M) Y=400-0:75 i %3D dation and %3DA project that will provde annual cash flows of $2,350 for nine years costs $9,700 today. a. At a required return of 12 percent, what is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. At a required return of 28 percent, what is the NPV of the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. At what discount rate would you be indifferent between accepting the project and rejecting it? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) а. NPV b. NPV C. Discount rate %The Rosy company, is planning to start an egg packing factory in the country of Bevery. The initial investment for the egg packing factory is $5Million and it will generate net revenues for every year for the next 10 years starting as $1M in the first year, and increasing by $0.5Million every year (e.g, 1M, 1.5M, 2M, 2.5M...). Currently £1 is equal to $20. However, the $ is being devalued (losing value) against the £ by 12% every year (so next year £1 will be $22.4 ). If Rosy company has a MARR of 30% in Bevery, what is the PW of this egg packing factory in £?
- Organize each of the following equations to express P as a function of Q. Q as a function of P P as a function of Q О%3D 30 — Р О%3D 12 — ЗР 80 3 18 — 2Р3. Your boss has suggested that, instead of a savings of $37,000 annually, it makes more sense to expect a savings that starts at $20,000 in year 3 and rises $2,000 per year to an ending value in year 13 of $40,000. She bases her suggestion on the fact that the experience curve will gradually reduce production costs. What would be the NPV of the cash flow at 4% if you adopt her suggestion?Matollows and 250 shillings in the following year. After that, dividends are expected to grow at constant 5% per year. If the required rate of return is 10%, what price should investors pay for such shares today? 4. Suppose a firm is considering a project that would require an initial cash outlay of 15 million shillings and expected to generate shs 4.5 million each year for the next 4 years. The firm assumes that the prices and costs increases at the same rate and that the required rate of return expressed in nominal terms is 14%. The firm also practices a policy whereby cash flows are stated at the prices of period zero. The inflation rate is expected to be 5%. (a)Outline two ways in which the effects that inflation has on the acceptability of investment projects could be considered. (b)Using the NPV technique, is the project worth taking? What have you learned from your analysis as far as treating inflation in investment analysis is concerned? 30/2021 4:39:41 PM Page 1 of 2
- Refer to the below figure: the saving function can be given as: Aggregate consumption (C) 270 200 130 60 450 100 S = -60 -0.3Y O S = -60+ 0.3Y O S = 60+ 0.7Y O S = -60 -0.7Y O S = -60 +0.7Y 200 300 Aggregate income (Y)An investor pays P1,100,000 for a mine which will yield a net income of x pesos at the end of each year for 10 years and then will become valueless. He accumulates a replacement fund to recover his capital by annual investments at 4.5%. Find x if he desires 11.5% return on his investment. a. P216,000 b. P246,000 c. P236,000 d. P226,000Fatima is an owner of a building and she can lease her building for 100,000 AED per year for two years. The explicit cost of maintaining the building is 30,000 AED, and the implicit cost is 50,000AED. All revenues are received, and costs borne, at the end of each year. If the interest rate is 10 percent, determine the present value of the stream of Accounting Profits? Economic Profits?
- Tonny is currently evaluating two mutually exclusive projects. Both projects have a cost of capital of 12% and can be replicated indefinitely with the same cash flows. Calculate the EAA (Equivalent Annual Annuity) payment for just Project L. t = 0 1 Project S: L A. $34.12 B. $36.91 C. $38.74 D. $40.23 E. $42.87 t = 0 Project L: (8700) 1 6500 2 2 2500 (8700) 1400 6800 3400E1 Prior to the expansion, the Fountainbleau profits were $60m and the Eden Roc's profits were $25m. If the Fontainebleau completes the highrise expansion, their profits will increase by A. If the expansion is built and Eden Roc makes no changes, Eden Roc's profits will fall by B from the shadow cast on its pool area. Eden Roc can convert the shaded region of their property to a nightclub (which is unaffected by any shadow). In that case, Eden Roc will earn a total profit of C. Alternatively, the Fountainblue can demolish the expansion and instead put in two story condominiums which will not interfere with Eden Roc's sunlight, but then will only increase profit by D. Suppose that Eden Roc loses the lawsuit, and Fountainebleau is permitted to complete construction as it chooses. A) What will each party choose to do in the absence of bargaining? B) What will be the threat values? C) What is the cooperative surplus from bargaining? Enter zero if there is no cooperative surplus to…EXAMPLE 5-1 An investment of $10,000 can be made in a project that will produce a uniform annual revenue of $5,310 for 5 years and then have a salvage value of $2.000, Annual disbursements will be $3,000 each year for operation and maintenance costs. The company is willing to accept any project that will earn :0% or more, before income taxes, on all invested capital. Show whether this is a desirable investment by using the present worth method. Draw the cash flow diagram
