Consider the following picture: y'-t' y-t If the interest rate on borrowing (r2) increases, what happens to consumption today? O it increases O It decreases O It's unchanged O Not enough information to answer

Consider the following picture: y'-t' y-t If the interest rate on borrowing (r2) increases, what happens to consumption today? O it increases O It decreases O It's unchanged O Not enough information to answer

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose the economy's saving schedule shifts from S1 to S 2 as shown in the above diagram. We can say that its: S2 Disposable income MPC has increased. MPS has increased. O APS has decreased at all levels of disposable income. O APS has increased at all levels of disposable income. Saving
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How is the marginal propensity to import calculated? The marginal propensity to import is equal to O A. disposable income minus consumption expenditure minus saving divided by real GDP B. the change in imports divided by the change in real GDP, other things remaining the same O C. imports minus exports D. the change in net imports divided by the change in disposable income, other things remaining the same Click to select your answer.
True, False, or Uncertain: Consider a consumer choosing how much to consumer this year or next year. When the interest rate declines, consumption in the present increases? x O True: as the interest rate declines, consumption in this year increases because consumption this year becomes cheaper. False: True: as the interest rate declines, consumption this year declines because consumption in the present becomes more expensive. Uncertain: the effect on consumption in the present depends on the timing of income the timing of income. True: as the interest rate declines, consumption in this year increases because consumption this year becomes more expensive.
Consider the following picture: c' A D B E F If the interest rate on borrowing (r2) increases, what happens to consumption today? it increases It decreases O It's unchanged Not enough information to answer
The following table provides data for output (real GDP) and saving. a. Fill in the missing numbers (gray-shaded cells) in the table. Instructions: In the table, enter your answers for consumption as a whole number. Round your answers for APC and APS to 3 decimal places. Round your answers for MPC and MPS to 1 decimal place. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Level of Output and Income (GDP = DI) Consumption Saving АРС APS MPC MPS 496 -0.033 -0.015 $480 $-16 1.033 520 528 -8 1.015 560 560 1.000 0.000 592 624 600 0.987 0.013 640 16 0.975 0.025 680 656 24 0.965 0.035 720 688 32 0.956 0.044 760 720 40 0.947 0.053 800 752 48 0.940 0.060
O Saving Propensity to Save Curve Dis-saving { Saving O a. Is negative. O b. Is zero. O c. None of the answers is correct. O d. Is positive. 4 Income According to the above diagram: when consumption is a positive amount, saving S
Suppose that the level of GDP increased by $100 billion in an economy where the marginal propensity to consume is 0.5. The initial change in spending must have been: O $5 billion O $100 billion O $50 billion O $500 billion
Question 35 Suppose real estate analysts expect that 100,000 homes will be needed in a particular community by 2014. If the current number of homes in the community is only 50,000, we can expect to see a significant increase in the demand for investment. True O False
Suppose the marginal propensity to consume in an economy is 0.60. If the disposable income in this economy changes by $50 billion, consumption changes by $ billion 50 40 20 30 O O O O