Real GDP Consumption Saving Investment $2,000 $ 2,000 4,000 3,600 6,000 5,200 8,000 6,800 10,000 8,400 12,000 10,000 a. Complete the table. What is the marginal propensity to consume? What is the marginal propensity to save? b. What is the average propensity to save at equilibrium real GDP? c. If autonomous consumption were to rise by $100, what would happen to equilibrium real GDP?

Real GDP Consumption Saving Investment $2,000 $ 2,000 4,000 3,600 6,000 5,200 8,000 6,800 10,000 8,400 12,000 10,000 a. Complete the table. What is the marginal propensity to consume? What is the marginal propensity to save? b. What is the average propensity to save at equilibrium real GDP? c. If autonomous consumption were to rise by $100, what would happen to equilibrium real GDP?

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 1.6P

See similar textbooks

Similar questions

Y C I G X $ 100 $ 120 $ 20 $ 30 $ 10 $ 300 $ 300 $ 20 $ 30 - $ 10 $ 500 $ 480 $ 20 $ 30 - $ 30 $ 700 $ 660 $ 20 $ 30 - $ 50 a.What is the multiplier? b.What is the equilibrium level of the real GDP? c.What is the value of autonomous consumption?
40. If the expenditure mutiplier in a closed economy without govemment activites equais 4 what is the MPC in ths economy? a. 025 b. 0.20 C. 0.75 d. 0.80 Use the information below to answer questions 41-43. In an economy at zero disposable income consumption is 1200 milion. The marginal propensity to save in this economy is 0.25 41. What is the consumption function for this economy? a. C 1200 0.25Yd b. C 1200 0.75YA C C-0+0.75Yd d. C=-1200 25Yda 42.If Yd = 6000 milion, what is consumption expenditure in this economy? a. 6000 million b. 5700 million e. 7200 millon d. 5200 million 43. What is saving in this economy at Yd= 6000 milion? a -1200 b. 300 C. 1200 d. 300 44. An increase in minimum wages unmatched by high productivity leads to a. demand pull inflation b. cost push inflation e. imported inflation d. creeping infation 45 Full employment occurs when a. actual output exceeds potential output b. actual output is less than potential output C. actual output is equal to potential output…
1.In Figure 1, when disposable income is 0, how much is consumption, saving, autonomous consumption, and induced consumption? 2.In Figure 1, when disposable income is 2500, how much is consumption, saving, autonomous consumption, and induced consumption? 3.In Figure 1, when disposable income is 4,000, how much is the consumption, savings, autonomous consumption and induced consumption?
Consumption and Savings Functions Disposable Income Consumption Saving -50 100 200 400 a. Please complete the table (assume linear functions) b. How much is Autonomous Consumption and Autonomous Savings? C. How much is mpc, mps, and E ? Write out the consumption funetion and the savings function, Using the data from the table, please graph the consumption and savings schedules in a model. d. e. For an increase in disposable income of $2000, using the current mpc, show five rounds of increases in planned expenditure. f.
Explain two effect of public expenditure on the investment??
personal consumption expenditures (C) and disposable income (Y d): Year C Y d1 300 400 2 500 700 a. Compute the marginal propensity to consume. b. Compute the amount of savings for years 1 and 2. c. Compute the marginal propensity to save.
The table below provides income and consumption data in billions of dollars: Disposable Income Consumption Savings 100 80 --- 200 150 --- What is the level of consumption when income is $300 billion? A) $200 billion B) $240 billion C) $210 billion D) $60 billion
SHORT ANSWER QUESTIONS Increase in foreign holdings of assets in the United States Exports of goods Imports of services Statistical discrepancy Net transfers Exports of services Imports of goods Income payments on investments Increase in U.S. holdings of assets in foreign countries Income received on investments b. the balance of trade c. the balance on the financial account $3,288 31. The following are hypothetical data on the U.S. balance of payments. You can assume the balance on capital account is zero. Use the data to calculate the following (SHOW YOUR WORK) a. the balance on the current account d. statistical discrepancy -$29 1 64 694 -1,520 -444 -3,286 545 12. State how each of the following will affect the relative values of the U.S. dollar and the British pound (say which currency appreciates and which currency depreciates): (a) U.S. citizens switch from buying stock in U.S. companies to buying stock in British companies. (b) The inflation rate in the United States decreases…
500 1,000 Aggregate output, Y (billions of dollars) Figure 8.1 Refer to Figure 8.1. An increase in the MPC Select one: Oa shifts the saving function downward. Ob.makes the caving function fatte Oashifts the consumption function upard. .2.makes the consumption function fatter) billions of dollars)
The table below shows aggregate values for a hypothetical economy. Suppose this economy has real GDP equal to potential output. Potential GDP $14 000 Government purchases $2100 Investment $300 Consumption $10 000 Net tax revenues $2000 Refering to the table above, what is th eprivate saving for this economy?
25 -100 -200 400 800 900 Aggregate income (in billions) Refer to Figure above Refer to the Figure above and find the following A. The equation for the aggregate consumption function is? B. Assuming society's MPs is constant, at an aggregate income level of $630, aggregate Saving would be? C. Assuming society's MPs is constant, at an aggregate income of $820 aggregate consumption would be? Aggregate saving (in billions)
3. If consumer spending increased by $25 billion, resulting as an equilibrium output increasing by $75 billion. What is the value of the MPC?