b. What will the multiplier be given the MPC values below? Fill in the table with your answers. Instructions: Round your answers to 2 decimal places. MPC Multiplier 1.0 0.9 0.75 0.5 c. How much of a change in GDP will result if firms increase their level of investment by $8 billion and the MPC is 0.80? Instructions: Enter your answers as whole numbers. billion

b. What will the multiplier be given the MPC values below? Fill in the table with your answers. Instructions: Round your answers to 2 decimal places. MPC Multiplier 1.0 0.9 0.75 0.5 c. How much of a change in GDP will result if firms increase their level of investment by $8 billion and the MPC is 0.80? Instructions: Enter your answers as whole numbers. billion

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question Can this be explained in a simple way? Thanks The following table illustrates a few rounds of the multiplier process for a 2 sector economy for an initial increase in exogenous planned investment of 50. delta PAE 50 35 24.5 17.15 delta y 50 35 24.5 17.15 What is the approximate value of the multiplier in this economy? 1.4 2.4 3.0 3.3 0.7 The first round effect on GDP comes for the increase in exogenous investment, but the subsequent rounds depend on the amount of the additional GDP/national income that is spent. This depends on the marginal propensity to consume. In round 2 we have 35 = c times 50. So c =0.7 and the multiplier is l/(l-0.7) = 3.3333 or approximately 3.3.
Why is consumption spending insufficient to explain economic growth and rising standards of living?
Answer the following questions: Instructions: Enter your answers rounded to the nearest whole number. a. By how much will GDP change if firms increase their investment by $12 billion and the MPC is 0.80? billion b. If the MPC is 0.50? %24 billion
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10. T/F/U. Fear of a recession causes a decrease in investment spending—I— which in turn impacts v. Draw a graph consistent with your answer.
From the graph , calculate the MPS for the saving function.
Refer to the figure at right. The equilibrium level of real GDP will occur A. at point A. B. to the left of point A. C. to the right of point A. D. at the undetermined point on the graph depending upon the level of investment.
The multiplier can be defined as: Select one: A. The ratio of the rise in national income to the rise in injections that caused it B. The ratio of the rise in government expenditure to the resulting rise in national income C. The ratio of a rise in investment to the resulting rise in withdrawals D. The ratio of a change in injections to a change in withdrawals
n an effort to make sales projections, M/s K, B and A, the three B-school executives of Vengaboys Inc., were discussing about the national income and its growth in Ibiza. K had estimated a linear consumption function for Ibiza to be C = 100 + 0.6 Y, and investment to be I = 100 per ear. In Ibiza, there was no income tax and government spending was minimal (assume 0). Ibiza was a closed economy, and hence no exports and imports. (i)K immediately knew what the investment Multiplier was. Can you find out? (ii)What is the level of income in Ibiza? (iii)K estimated that with Government spending 100 on a new road to be constructed, the income levels are sure to go up. K quickly calculated the change in income and the new income level to be:
Based on the chart in question 8.06, if investment rises from $120 to $130 and the price level is fixed. By how much will the equilibrium real GDP increase?
Answer the following questions: Instructions: Enter your answers rounded to the nearest whole number. a. By how much will GDP change if firms increase their investment by $13 billion and the MPC is 0.80? 2$ billion b. If the MPC is 0.50? $ billion
If an economy were already at its potential GDP (ie its full-employment GDP), what would happen to the value of the multiplier? please help asap thank u