1. Graphing the consumption function from the MPCConsider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.50. That is, if disposable income increases by $1,consumption increases by 50¢.Suppose further that last year disposable income in the economy was $400 billion and consumption was $300 billion.On the following graph, use the blue line (circle symbol) to plot this economy's consumption function based on these data.CONSUMPTION (Billions of dollars)7006005004003002001000-100O0O100200 300 400 500600DISPOSABLE INCOME (Billions of dollars)700800Screenshot From the preceding data, you know that the level of savings in the economy last year was $economy isSuppose that this year, disposable income is projected to be $500 billion. Based on your analysis, you would expect consumption to bebillion and savings to be $billion.$billion and the marginal propensity to save in thisScreenshot

Consider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.50. That is, if disposable income increases by $1, consumption increases by 50¢. Suppose further that last year disposable income in the economy was $400 billion and consumption was $300 billion. On the following graph, use the blue line (circle symbol) to plot this economy's consumption function based on these data. (Billions of dollars) 700 600 500 400 300 (?

Consider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.50. That is, if disposable income increases by $1, consumption increases by 50¢. Suppose further that last year disposable income in the economy was $400 billion and consumption was $300 billion. On the following graph, use the blue line (circle symbol) to plot this economy's consumption function based on these data. (Billions of dollars) 700 600 500 400 300 (?

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 1.1P

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Consider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.50. That is, if disposable income increases by $1, consumption increases by 50c. Suppose further that last year disposable income in the economy was $400 billion and consumption was $350 billion. On the following graph, use the blue line (arcle symbol) to pict this economy's consumption function based on these data. CONSUMPTION (Bions of dollars) ) 700 600 500 400 300 200 100 0 -100 9 100 200 300 400 500 000 DISPOSABLE INCOME (Billions of dollars) 700 000 From the preceding data, you know that the level of savings in the economy last year was 3 economy is billion and the marginal propensity to save in this Suppose that this year, disposable income is projected to be $600 billion. Based on your analysis, you would expect consumption to be 3 billion and savings to be S billion,
5 Consider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.50. 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 $200 billion. On the following graph, use the blue line (circle symbol) to plot this economy's consumption function based on these data. CONSUMPTION (Bens of dolar) 700 600 500 400 300 100 0 100 200 400 600 500 DISPOSABLE INCOME (Billions of dollars) 300 700 000 101 From the preceding data, you know that the level of savings in the economy last year was economy is billion and the marginal propensity to save in this Suppose that this year, disposable income is projected to be $400 billion. Based on your analysis, you would expect consumption to be s billion and savings to be billion.
Economics 1. Graphing the consumption function from the MPC Consider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.75. That is, if disposable income increases by $1, consumption increases by 75c. Suppose further that last year disposable income in the economy was $500 billion and consumption was $400 billion. On the following graph, use the blue line (aircle symbol) to plot this economy's consumption function based on these data. (?) 700 600 300 -100 400 500 600 700 100 200 300 DISPOSABLE INCOME (Blions of dotans) From the preceding data, you know that the level of savings in the economy last vear was s billion and the marginal propensity to save in this economy is Suppose that this year, disposable income is projected to be $700 billion. Based on your analysis, you would expect consumption to be S billion and savings to be S billion, CONSUMPTION (Bilions of dolars)
Economics 1. Graphing the consumption function from the MPC Consider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.75. That is, if disposable income increases by $1, consumption increases by 75c. Suppose further that last year disposable income in the economy was $500 billion and consumption was $400 billion. On the following graph, use the blue line (aircle symbol) to plot this economy's consumption function based on these data. 700 600 300 -100 300 400 500 600 700 100 200 DISPOSABLE INCOME (Blions of dotani) From the preceding data, you know that the level of savings in the economy last vear was s billion and the marginal propensity to save in this economy is Suppose that this year, disposable income is projected to be $700 billion. Based on your analysis, you would expect consumption to be S billion and savings to be s billion, CONSUMPTION (Blions of dolars)
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Consider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.50. That is, if disposable income increases by $1, consumption increases by 50¢. Suppose further that last year disposable income in the economy was $450 billion and consumption was $400 billion. On the following graph, use the blue line (circle symbol) to plot this economy's consumption function based on these data. CONSUMPTION (Blions of dollars) 700 800 500 400 300 200 100 0 -100 0 O ہے 100 200 300 400 500 600 DISPOSABLE INCOME (Billions of dollars) 700 800 10 Consumption Function From the preceding data, you know that the level of saving in the economy last year was economy is billion and the marginal propensity to save in this Suppose that this year, disposable income is projected to be $650 billion. Based on your analysis, you would expect consumption to be S billion and saving to be S billion,
Consider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.50. That is, if disposable income increases by $1, consumption increases by 50¢. Suppose further that last year disposable income in the economy was $400 billion and consumption was $300 billion. On the following graph, use the blue line (circle symbol) to plot this economy's consumption function based on these data.
3. The consumption function Suppose that national income in a country is $30 billion, taxes paid by households is $10 billion, household consumption is $18 billion, and the marginal propensity to consume (MPC) is 0.8. On the following graph, use the blue line (circle symbol) to plot the economy's consumption function. CONSUMPTION (Billions of dollars) 50 45 40 35 30 25 20 15 10 5 0 0 5 + + + 10 15 20 25 30 35 40 DISPOSABLE INCOME (Billions of dollars) O $25.2 billion $26.8 billion $24.4 billion 45 0.8, Suppose now that country's national income increases to $34 billion. Assuming the amount paid in taxes is fixed at $10 billion and that MPC = what will be the new household consumption? $21.2 billion 50 Consumption Function (?)
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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
Consider the hypothetical country of Kejimkujik. Suppose that national income in Kejimkujik is $300 billion, households pay $100 billion in taxes, household consumption is equal to $160 billion, and the marginal propensity to consume (MPC) is 0.6. On the following graph, use the blue line (circle symbol) to plot the economy's consumption function. Consumption Function050100150200250300350400450500500450400350300250200150100500CONSUMPTION (Billions of dollars)DISPOSABLE INCOME (Billions of dollars) Suppose now that Kejimkujik’s national income increases to $330 billion. Assuming the amount paid in taxes is fixed at $100 billion and that MPC = 0.6, what is the new amount of household consumption? $148 billion $219.4 billion $220.6 billion $178 billion
2. The consumption function Consider a country with the national income of $12 billion, the amount of taxes paid by households of $3 billion, and household consumption of $7 billion. Suppose that the marginal propensity to consume (MPC) is 0.75. 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 $7 billion. Then, plot the second point when real disposable income rises by $4 billion. REAL CONSUMPTION (Billions of dollars) 20 18 16 + 14 12 10 0 0 2 4 6 8 10 12 14 16 18 20 REAL DISPOSABLE INCOME (Billions of dollars) -0 O $7.75 billion O $9.75 billion O $7.5 billion O $10.75 billion Consumption Function (?) Suppose now that country's national income increases to $13 billion. Assuming the amount paid in taxes is fixed at $3 billion and MPC= 0.75, what will be the new household consumption?