6. You are given the following consumptionfunction :C = RM150 million + 0.75YdBased on the above consumptionfunction, answer the following questions:a.Determine the saving functionHow much is :b.1. Autonomous consumptionII. Autonomous savingC.How much is the disposable incomewhen saving is zero?d.If there an investment of RM200million, what will be the newequilibrium level of income.e.If G = 100, calculate the newequilibrium level if governmentexpenditure increased from RM100to RM150f. If I = 100, calculate the newequilibrium level if investmentdecrease to RM50

We have given consumption function C=150+0.75Yd where yd is a disposable income.

6. You are given the following consumption function: C = RM150 million +0.75Yd Based on the above consumption function, answer the following questions: a. Determine the saving function How much is : b. 1. Autonomous consumption II. Autonomous saving C. How much is the disposable income when saving is zero?

6. You are given the following consumption function: C = RM150 million +0.75Yd Based on the above consumption function, answer the following questions: a. Determine the saving function How much is : b. 1. Autonomous consumption II. Autonomous saving C. How much is the disposable income when saving is zero?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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120 100 80 60 40 20 45° 20 40 60 80 100 120 Income (Billions) Refer to the above figure. If the relevant saving schedule were constructed: 1) its slope would be 1/2. 2) it would slope downward and to the right. 3) saving would be minus $20 billion at the zero level of income. 4) aggregate saving would be $60 at the $60 billion level of income. Consumption (Billions)
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Assume that total expenditure E comprises the sum of government consumption, G, household consumption, C, and investment, I. Assume a closed macroeconomic system, so that income equals expenditure Y=E. If we define household saving, SH, as SH=Y-T-C, where the cunsumption function is a fixed proportion of disposable income, C=c(Y-T), which of the following will be true? a. Higher government spending alongside unchanged taxation will lead to higher investment and higher household saving b. Higher government spending alongside unchanged taxation will have no effect on household saving or investment c. Higher government spending alongside unchanged taxation will lead to higher household saving d. Higher government spending alongside unchanged taxation will lead to lower household saving
Figure 7.2 45° C, S S Y=200 In Figure 7.2, if income is $200, then: consumption is $100. saving is also $200. consumption is zero. O saving is zero.
Consider an economy described by the following equations:Y=C + I +GY=7,000G=4000T=2,000C=150+0.75(Y-T)I=1,000-50rb. Calculate the equilibrium interest rate. c. Now suppose the G rises by 1,000. Compute private saving, public saving, andnational saving.d. Calculate the new equilibrium interest rate.For these 3 questions please only show the graphical response.
Assume that the unintended investment is negative. Briefly outline how the level of Ye will change in response to this. how is the impact of change related to the size of the multiplier?
Suppose that Maria spends 84,500 on consumption, her disposable income is $90,000 and her Marginal Propensity to Save is .15. What does Maria's autonomous consumption equal? Select one: a. $5,500 b. $6,500 c. $7,000 d. $8,000
Consider an the following equations: Y=C + I +G Y=7,000 G=4000 T=2,000 C=150+0.75(Y-T) I=1,000-50r a. compute private saving, public saving and national saving. b. Calculate the equilibrium interest rate. c. Now suppose the G rises BY 1,000. Compute private saving, public saving, and national saving.
er! 3. Draw a graph representing a hypothetical economy. Carefully label the two axes, the S + T + IM curve, the PYcurve, and the equilibrium level of real GDP. Illustrate the effect of an increase in the level of autonomous saving.
The following table provides data for output (real GDP) and saving. a. Fill in the missing numbers (gray-shaded cells) in the table. Instructions: In the table, enter your answers for consumption as a whole number. Round your answers for APC and APS to 3 decimal places. Round your answers for MPC and MPS to 1 decimal place. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Level of Output and Income (GDP = DI) Consumption Saving АРС APS MPC MPS 496 -0.033 -0.015 $480 $-16 1.033 520 528 -8 1.015 560 560 1.000 0.000 592 624 600 0.987 0.013 640 16 0.975 0.025 680 656 24 0.965 0.035 720 688 32 0.956 0.044 760 720 40 0.947 0.053 800 752 48 0.940 0.060
10. Work It Out. Consider an economy described as follows: Y = = Y G T 1 1 Cam C = I C+I+G 8,000 2,500 2,000 1000+2/3 (Y - T) 1,200 100 r. a. In this economy, compute private saving, public saving, and national saving. b. Find the equilibrium interest rate. c. Now suppose that G is reduced by 500. Compute private saving, public saving, and national saving. d. Find the new equilibrium interest rate.
At an aggregate output level of $400 billion what is aggregate savings?