1. If the consumption function in an economy as follows C = 50 + 0.75Y and the following variables fixed at investment = 250 MD Government expenditure = 200MJD, Net exports = 200MJD, so the equilibrium income is equal
Q: 1. Compute the MPS and the MPC
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A: MPC = coefficient of Y = 0.6 Multiplier = 1 / (1 - MPC) = 1 / (1 - 0.6) = 1/0.4 = 2.5
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Q: Question. Suppose in an economy, autonomous investment (1) is $ 600 crores and the following…
A: Answer: Hence income i.e I = 600
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A: If MPC=0.8 then MPS=1-MPC MPS=1-0.8 MPS=0.2
Q: If the consumption function in an economy as follows C = 50 + 0.75Y and the following variables…
A: Given data: Consumption, C= 50+0.75Y Investment, I=250 MD Government expenditure (G)=200 MJD, Net…
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Q: . If the consumption function in an economy as follows C = 50 + 0.75Y and the following variables…
A: Given information: C = 50 + 0.75Y investment = 250 MJD Government expenditure = 200MJD Net…
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A: When the income is zero, the savings is -50. And when the income is 1000, savings is 0.
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Q: If the consumption function in an economy as follows C = 50 + 0.75Y and the following variables…
A: Given: Consumption function: C=50+0.75Y
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Q: If the consumption function in an economy as follows C = 50 + 0.75Y and the following variables…
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A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
1. If the consumption function in an economy as follows C = 50 + 0.75Y and the following variables fixed at investment = 250 MD Government expenditure = 200MJD, Net exports = 200MJD, so the equilibrium income is equal
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- Q.30. C = 100 + 0.4 Y is the Consumption Function of an economy where C is Consumption Expenditure and Y is National Income. Investment expenditure föfeign exchange etc. financing, is 1100. Calculate: () Equilibrium level of National Income.Suppose the consumption of an economy is given by C = 20 +0.6Y The following investment function is given : 1 = 10+ 02Y What will be the equilibrium level of national income?1. Given the following table. Income (RM million) Consumption (RM million) 0 100 100 150 200 200 300 250 400 300 500 350 How much is the autonomous consumption in the economy? How much investment should be increased to achieve an income of RM400 million? Calculate the MPS. Derive the consumption function. 2. Given the following information, C = 500 + 0.7Yd T = 0.2Y I = 400 G = 100 Calculate the national income equilibrium. Based on your answer in (a), draw the aggregate expenditure graph. Suppose that investment changes by 300, what would happen to the national income equilibrium? Suppose that tax (T) changes, and the new T is T = 0.2 Y + 50, calculate the new national income equilibrium. 3. Given the following information, S = -200 + 0.3Y I = 100 Calculate the national income equilibrium by using the Leakage-Injection approach. Calculate the value of saving. Draw the aggregate expenditure graph.
- Sa = -5000 and mpc or c = 0.8 Formulate the consumption function & interpret the function. Formulate the savings function & interpret the function.Consider the Savings-Investment model involving: The Savings function: S = S0+s1Y+s2r; and the Investment function: I = I0+ir; where: Y = GDP, r = interest rate; and equilibrium occurs when Savings equal Investment. (i) Solve for the equilibrium GDP Y* (ii) Using your Y*, find the Investment-Multiplier dY*/dI0Question. Suppose in an economy, autonomous investment (I0) is $ 600 crores and the following consumption function is given : C = 200+ 0.8Y %3D Given the above, find out the equilibrium level of income.
- Find the equilibrium level of GDP (income or V) demanded in an economy in which investment (1) is always $300, net exports (X-IM) are always - 550, government expenditures (G) and taxes (T) are each equal to $400, and the consumption function is described by the following algebraic equation: C = 150 + 0.75Dl DI is disposable income. How much saving (5) is there at the equilibrium level of income. Hint: (1) Dl = Y (national income or GDP) minus taxes (Y-T) (2) Income (Y) not consumed (C) must be saved (S). This means that S = Y-C. (3) to answer this you have to set Y=AE or Y=C+1+G (X-IM), and solve for Y. Then you have to solve for S.Please calculate level of GDP in equilibrium, consumption and savings level if you know that: I (investment) = 300 Ca (Autonomous Consumption) = 100 MPS (Marginal Propensity to Save) = 0,1 G (Government Expenditures) = 300 T (net taxe rate) = 0,2The consumption function for a closed economy with no government sector is given by the equation: C = £200 million + 0.8 Y where C is aggregate consumption and Y is national income. (i) Calculate the value of aggregate savings if the level of national income is £4000 million. (ii) Calculate the equilibrium level of national income if the level of planned investment is £600 million. (ii) Calculate the level of aggregate consumption at the equilibrium level of national income if the level of planned investment is £1000 million. Calculate the change in national income if planned investment rose from £600 (iv) million to £800 million.
- The following consumption function of an economy is given; 40+0.8Y where Y is national income If the planned level of investment in a year equals 75 crores, what will be the equilibrium level of national income and consumption ?in an imaginary economy, there is no foreign trade and no government activity. APC = MPC = 0.08. In equilibrium, consumption expenditure is Rs,20, 000 Million. (a) What is ihe level of invesiment expenditure? (b) What is the value of the multiplier (c) Suppose investment spending remains unchanged but both APC and MPC fall to 0.06, what is the new equilibrium level of national income?Consumption Function Suppose that a country's consumption function is given by C=(9\sqrt(I)+0.8\sqrt(I^(3))-0.3I)/(\sqrt(I)) where C and I are expressed in billions of dollars. (a) Find the marginal propensity to save when income is $25 billion. (b) Determine the relative rate of change C with respecy to I when income is $25 bilion.