At an intial point on the aggregate demand curve, the price level is 100, the real GDP is $18 trillion. After the price level rises to 110, however there is an upward movement along the aggregate demand curve, and real GDP declines to $14 trillion. If total planned spending declines by $200 billion in response to the increase in the price level, what is the MPC in this economy?

At an intial point on the aggregate demand curve, the price level is 100, the real GDP is $18 trillion. After the price level rises to 110, however there is an upward movement along the aggregate demand curve, and real GDP declines to $14 trillion. If total planned spending declines by $200 billion in response to the increase in the price level, what is the MPC in this economy?

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter9: The Keynesian Model In Action

Section: Chapter Questions

Problem 13SQ

See similar textbooks

Similar questions

What is the eventual effect on real GDP if the government increases its purchases of goods and services by $75,000? Assume the marginal propensity to consume (MPC) is 0.75. $ What is the eventual effect on real GDP if the government, instead of changing its spending, increases transfers by $75,000? Assume the MPC has not changed. $ An increase in government transfers or taxes, as opposed to an increase in government purchases of goods and services, will result in an identical eventual effect on real GDP. no change to real GDP. a larger eventual effect on real GDP. a smaller eventual effect on real GDP.
You Suppose the government increases education spending by $20 billion. If the marginal propensity to consume is 0.75, how much will total spending increase? Instructions: Round your response to one decimal place. $ billion
The Japanese government decides to stimulate the economy by increasing direct spending by $70 billion. If the final change in real GDP is $280 billion, what is Japanese consumers' marginal propensity to consume (MPC)? Please round your answer to two decimal places.
Why can’t an economy with an MPC greater than 1 reach a stable equilibrium in the aggregate expenditure model?
If planned aggregate spending rises by $10 billion and the marginal propensity to consume is 0.75, then equilibrium real GDP changes by:
Given that autonomous spending is 100 billion, disposible income is 20 billion, and marginal propensity to consume (MPC) is 10 billion: what is aggregate consumption? 300 billion 450 billion 250 billion 500 billion
If aggregate demand is increased by 4500 and MPC is 0.75, what is the increase in Y?
The level of AD needed to achieve full employment is $150 billion. The current level of Real GDP (output) is $100 billion. A $5 billion increase in government spending closes the gap and restores FullEmployment. What is the Marginal Propensity to Consume?
Macmillan Learning What is the eventual effect on real GDP if the government increases its purchases of goods and services by $60,000? Assume the marginal propensity to consume (MPC) is 0.75. What is the eventual effect on real GDP if the government, instead of changing its spending, increases transfers by $60,000? Assume the MPC has not changed. An increase in government transfers or taxes, as opposed to an increase in government purchases of goods and services, will result in O no change to real GDP. O a smaller eventual effect on real GDP. a larger eventual effect on real GDP. O an identical eventual effect on real GDP.
The spreadsheet lists the components of aggregate planned expenditure at different levels of real GDP in billions of dollars Calculate the marginal propensity to consume The marginal propensity to consume is >>>Answer to 1 decimal place In equilibrium, autonomous expenditure is 5 and induced expenditure is A B с D E Y 0 100 200 190 50 C 30 50 -1818181RISIRIS SAME 300 270 50 350 50 400 F 500 430 50 G 600 510 50 G 00 35 35 60 35 110 50 60 THE ▬▬▬▬▬ 818181812 plaalala B X M 0 15 30 60 60 35 45 60 75 55555 35 60 35 calc -- M 60 35 S 90
If the MPC in an economy is 0.9, a $4 billion increase in government spending will ultimately increase consumption by
Note: I need help with parts d, e, and f only Following is information for the economy of Sparkle. All units are milliondollars. Their autonomous consumption is $700, and the marginal propensity to consume is 0.8.Investment spending is constant at $380, and government expenditure is constant at $300.Exports are constant at $500, and imports are constant at $800. Net taxes are constant at $100.Calculate and state your answers for the following questions.a) What is the value of consumption in this economy when the real GDP is $1100?b) What is the value of autonomous aggregate planned expenditure i.e. AE0?c) What is the value of equilibrium aggregate expenditure for this economy?d) What is the value of unplanned changes in the inventory investment when real GDP is$4000?e) What is the size of the multiplier in this economy?f) If investment spending increases by $50, what would be the value of the change in theequilibrium real GDP?