Answered: a. Compute the MPS and the MPC b.…

a. Compute the MPS and the MPC b. Consider the consumption equation C=a=b.Y. Compute a and b. C. At a level of Income of $400, compute C and S

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter8: The Keynesian Model

Section: Chapter Questions

Problem 6SQ

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Precisely how do the APC and the MPC differ? Why must the sum of the MPC and the MPS equal 1? What are the basic determinants of the consumption and saving schedules? Of your personal level of consumption?
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.
Chapters 8 & 10 Asses X FAIPQLSCOCJPF-ZgZljGhgOrg9G0at6VZHrVrtveBGSlulokla hw/formResponse Because of the multiplier, a one-time change in expenditure will generate more additional real GDP than the initial change in expenditure* O True False If the consumption function lies above the 45-degree line, then saving at these levels of disposable income will be positive * O True O False The clonn of:
I consumed all my income at every level of income.Draw my consumption and saving function.What are my MPC and MPS? Explain why it must always be true that MPC+MPS equal to 1?
Assume the following consumption schedule: C= 20 + 0.9 Y, where C is consumption and Y is disposable income. At $1,100 level of disposable income: (show your cacuators) a. Find out the level of saving and consumption? b. How much are the APC and APS (to one decimal place)? c. If dispr able income increased to $2,800 and saving is $345 now. What are MPC and MPŚ (to two decimal places)?
The table shows disposable income and saving in an economy. Calculate consumption expenditure at each level of disposable income. Over what range of disposable income is there dissaving? Estimate the level of disposable income at which saving is zero. >>> Answer to 1 decimal place. Disposable income 0 (trillions of dollars) Saving 10 20 30 40 53--35 50 5 When disposable income is $30 trillion, consumption expenditure is $ trillion.
Complete the following table:a. Show the consumption and saving schedules graphically.b. Find the break-even level of income. Explain how it is possible for households to dissave at very low income levels.c. If the proportion of total income consumed (APC) decreases and the proportion saved (APS) increases as income rises, explain both verbally and graphically how the MPC and MPS can be constant at various levels of income.
Fill in the aggregate saving column in the following table. Use the data in the table to calculate the con- sumption function and the saving function, and plot these functions as well as the 45-degree line on a graph. What are the values for the MPC and the MPS? Aggregate Income, Y Aggregate Consumption, C Aggregate Saving, S $ 0 $200 100 250 200 300 300 350 400 400 500 450 600 500
The accompanying graph represents the aggregate consumption function for the small island nation of Pineapple Paradise. The people of Pineapple Paradise expect their future disposable income to increase. Use the graph to show an increase in consumption expenditures. What is the new level of aggregate autonomous consumer spending? 1 $1000 2 $3000 3 $2000 4 $4000
a. Calculate the missing values in the table below given that the Aggregate Consumption Function for a country is equal to C = 150 + 0.75Y, and planned investment is fixed at 300. Aggregate Consumption Investment (C) Planned Aggregate Output (Income) (Y) Planned Aggregate Expenditure (AE) Unplanned Inventory Change (Y-AE) Equilibrium (1) 1,500 300 1,800 300 2,100 300 2,400 300 2,700 300 b. What is the equilibrium level of output? What is likely to happen to aggregate output if the economy produces at below the equilibrium level? C.
Study the scenario and complete the question(s) that follow(s): Silesia You are provided with the following information about an imaginary economy called Silesia. Use the information provided in the table to answer the questions below. Government expenditure 400 Exports 250 Autonomous imports 50 Autonomous consumption 150 Investment Expenditure 300 Full-employment output 2040 Marginal propensity to consume 0.75 Marginal propensity to import 0.15 Таx rate 0.25 5.1 Derive and calculate the consumption function for the data provided. Show all formulas and calculations used. 5.2 Calculate autonomous spending. Show all formulas and calculations used. 5.3 Calculate the multiplier. Show all formulas and calculations used. Round off your final answer to 1 decimal. 5.4 Calculate the equilibrium level of income, using the values calculated in 5.2 and 5.3 above. Show all formulas and calculations used. 5.5 Calculate the government surplus or deficit at the equilibrium level of income. Show all…
5. Graphing the saving and consumption functions from MPC Consider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.5. That is, if disposable income increases by $1, consumption increases by 50¢. Suppose further that last year, disposable income in the economy was $300 billion and consumption was $250 billion. Based on these data, use the blue line (circle symbols) to plot this economy's consumption function on the following graph. REAL CONSUMER SPENDING (Billions of dollars) 700 600 500 400 300 200 100 0 Aa Aa -100 Consumption Fn. O O 0 100 200 300 400 500 600 700 800 REAL DISPOSABLE INCOME (Billions of dollars) Help Clear All Suppose that this year, disposable income is projected to be $340 billion. Based on your analysis, you would expect consumption to be and saving to be