**Table and Explanation:**The table represents Disposable Income (DI), Consumption, Saving, Average Propensity to Consume (APC), Average Propensity to Save (APS), Marginal Propensity to Consume (MPC), and Marginal Propensity to Save (MPS) in billions of dollars for a private, closed economy.| DI (Billions) | Consumption (Billions) | Saving (Billions) | APC | APS | MPC | MPS ||---------------|------------------------|-------------------|------|------|------|------|| 0 | 8 | ---- | ---- | ---- | ---- | ---- || 40 | 40 | | | | | || 80 | 72 | | | | | || 120 | 104 | | | | | || 160 | 136 | | | | | || 200 | 168 | | | | | || 240 | 200 | | | | | |**Questions and Analysis:****(a)** If plotted on a graph, the slope of the consumption schedule would be evaluated.**(b)** Determine the break-even level of income and the corresponding saving level. Discuss dissaving, which occurs when households spend more than their disposable income, potentially liquidating assets or borrowing money. Analyze how savings increase as income rises.**(c)** Explore the effect on APC if consumption increases by $10 billion at each level of disposable income and how MPC will change.**(d)** APC is the fraction of DI spent on consumer goods, whereas APS is the fraction of DI saved. Discuss how APC and APS change as DI increases.**(e)** When income changes, there are only two options: spending or saving. APC and MPC reflect the fraction of income spent, while APS and MPS reflect the fraction saved. Explain how the changes in consumption or savings contribute to the total income change, with MPC and MPS summing up to 1.

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Complete the accompanying table with disposable income (DI) and consumption (C) schedules for a private, closed economy. All figures are in billions of dollars. DI Consumption Saving АРС APS MPC MPS 8 ----- ---- ---- ---- 40 40 80 72 120 104 160 136 200 168 240 200 Refer to the above data. If plotted on a graph, the slope of the consumption schedule would be: O The break-even level of income is ($ ) where saving equals ( $

Complete the accompanying table with disposable income (DI) and consumption (C) schedules for a private, closed economy. All figures are in billions of dollars. DI Consumption Saving АРС APS MPC MPS 8 ----- ---- ---- ---- 40 40 80 72 120 104 160 136 200 168 240 200 Refer to the above data. If plotted on a graph, the slope of the consumption schedule would be: O The break-even level of income is ($ ) where saving equals ( $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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