Consider a country with the national income of $300 billion, the amount of taxes paid by households of $130 billion, and household consumption of $180 billion. Suppose that the marginal propensity to consume (MPC) is 0.7. On the following graph, use the blue line (circle symbol) to plot the economy's consumption function. Hint: You should plot the first point where household consumption equals $180 billion, Then, plot the second point when real disposable income rises by $100 billion. RE AL CONSUMPTION (Billions of dollars) 500 450 400 350 300 250 200 150 100 50 + o D 50 100 150 200 250 300 350 400 450 500 REAL DISPOSABLE INCOME (Billions of dollars) о Consumption Function ? Suppose now that country's national income increases to $350 billion. Assuming the amount paid in taxes is fixed at $130 billion and MPC 0.7, what will be the new household consumption? O $250.7 billion O $215 billion O $249.3 billion O $180 billion
Consider a country with the national income of $300 billion, the amount of taxes paid by households of $130 billion, and household consumption of $180 billion. Suppose that the marginal propensity to consume (MPC) is 0.7. On the following graph, use the blue line (circle symbol) to plot the economy's consumption function. Hint: You should plot the first point where household consumption equals $180 billion, Then, plot the second point when real disposable income rises by $100 billion. RE AL CONSUMPTION (Billions of dollars) 500 450 400 350 300 250 200 150 100 50 + o D 50 100 150 200 250 300 350 400 450 500 REAL DISPOSABLE INCOME (Billions of dollars) о Consumption Function ? Suppose now that country's national income increases to $350 billion. Assuming the amount paid in taxes is fixed at $130 billion and MPC 0.7, what will be the new household consumption? O $250.7 billion O $215 billion O $249.3 billion O $180 billion
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Typed plz
Please solve according to question as he he asking please take care of plagiarism aslo
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education