Q: Explain why investment (I) varies more from year-to-year than consumption (C).
A: Lets understand the factors on which the investment depends: 1. Marginal efficiency of capital: It…
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Q: Which of the following is included in Investment (I)? the amount spent on new factories and…
A: Investment, with regards to economics, alludes to the expenditure or allotment of assets for the…
Q: An increase of $200 million In investment leads to a rise in national income by $1000 million. Find…
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Q: Calculate the equilibrium level of income in the economy, if C = 500+ 0.9Y. and investment…
A: Consumption function in the economy; C = 500+ 0.9Y Investment expenditure = 3000
Q: An increase in net taxes will O increase the household consumption. O increase the saving. O…
A: Household consumption is positively related to disposable income. An increase in disposable income…
Q: An increase in the interest rate should increase investment spending. decrease consumption spending.…
A: Aggregate demand is the sum of Consumption spending, investment spending, government spending and…
Q: (M: 10,000 Government Spending (G): 1,500 Desired Consumption (C): 8,500 If the goods market is in…
A: here we calculate the desired level of investment in a closed economy by using the given information…
Q: Which of the following will not cause an increase in equilibrium GDP? a) an increase in government…
A: According to the expenditure approach of calculating national income, Y= C+I+G+NX C is the domestic…
Q: True/False An increase in savings implies a decrease in consumption and therefore a decrease in…
A: The function of Income is given by Y= C+S, which means income(Y) is a combination of savings and…
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A: The term "business investment" refers to the expenditure of resources by a company or an individual…
Q: Aggregate demand (AD) is A,B,C, OR D A total spending, economy-wide, on durable goods and services.…
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A: GDP( Gross Domestic Product) GDP refers to the production level of an economy of a nation during a…
Q: Disposable income Consumption (dollars) expenditure (dollars) 0 100 300 500 700 900 In the above…
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Q: True or false Disposable income is the income that remains to the household for the use of…
A: Disposable income is the money remaining for a household to spend or save after taxes have been…
Q: The MPS is 1 + MPC. O the change in saving divided by the change in income. total saving divided by…
A: Marginal propensity to save (MPS): - it is a fraction of the change in income that is being saved.
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Q: The marginal propensity to consume is a)the average amount of income that is consumed or spent…
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Q: In an economy C= 300 + 0.6Y and I= 400 C is denoted to be as the Consumption Y is the Income and I…
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A: Given the consumption (C) = 500 billion National income (Y) = 100 billion
Q: Calculate the value of final Consumption Expenditure when the value of national income is $5000 ,…
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Q: In an economy the marginal propensity to consume is 0.9 and increase in investment is of 100 million…
A: Below is the given values: The marginal Propensity consume = 0.9 Increase in investment = 100…
Q: The marginal propensity to consume is typically a. between -1.0 and 1.0 b. between zero and…
A: Marginal propensity to consume refers to the increase in consumption with a dollar increase in…
Q: Autonomous consumption is independent of income and must equal to zero True False
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Q: Which of the following statements is correct? The saving function and the consumption function…
A: The consumption function shows the direct relationship between consumption and disposable income. It…
Q: If in an economy the consumption level is given as $110 while the disposable income is $220 find…
A:
Q: The Consumption at zero level of income is called
A: # We must know that even when the consumers have zero disposable income, at such point also some…
Q: An increase in savings implies a decrease in consumption and therefore a decrease in GDP.True/False…
A: Increase in savings reduces the consumption of the consumer. Reduction in consumption means, the…
Q: Explain the relationship between output and income for both an individual and an entire economy.
A: To understand the relationship beween output and income for an individual and the whole economy, we…
Q: If MPC is 0.9 and increase in investment is of $ 100 billion. Find the increase in national income.
A: Given, MPC = 0.9 Increase in investment = $100 Increase in national income = ?
Q: The marginal propensity to consume is: the amount of consumption at a specific level of income.…
A: Consumers make use of their income for both consumption and saving purposes. Consumption is the…
![Dissaving occurs where:
O saving exceeds consumption.
saving exceeds income.
income exceeds consumption.
consumption exceeds income.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6ba2043d-be22-4e26-961a-b5d172593037%2F19f8949e-d8d9-4a94-b49f-eaabd69197e6%2F980wa9r_processed.png&w=3840&q=75)
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- An increase in net taxes will O increase the household consumption. increase the saving. decrease the household consumption. increase the disposable income.Find the saving when the income is 50 and consumption is 60Assume a closed economy where the level of investment is 300 and savings function is s = -30+ 0.15y calculatr the equilibrium level of income
- (a) Explain the difference between induced consumption expenditure and autonomous consumption expenditure. Why is not all consumption expenditure induced expenditure? (b) How is it possible for households to have a negative savings rate and what has caused this negative household savings rate? Is this negative household savings rate sustainable in the long run?The following table shows data for the economy before the decrease in saving. Suppose that the decrease in saving causes consumption to rise from $280 million to $320 million. Assume Say's law holds in this economy. Fill in the data for the economy after the decrease in saving. Before Saving Decrease After Saving Decrease Consumption (C) $280 million $320 million Investment (I) $200 million $ million Government Purchases (G) $250 million $ million Exports (EX) $500 million $500 million Imports (IM) $300 million $300 million As a result of the decrease in saving, total expenditures will .I need the answer as soon as possible
- Consumption-savings decisions involve intertemporal choice as this is a decision involving a tradeoff between current and future investment. consumption and investment. current and future consumption. consumption and saving. consumption per worker and income per worker. OOIf Evan's income is reduced to zero after he loses his job, his consumption will be and his saving will be a.greater than zero; less than zero b.greater than zero; greater than zero c.less than zero; greater than zero d.less than zero; less than zeroSaving = a. disposable income minus taxes b. income minus taxes c. 1 – MPC d. disposable income minus consumption
- What is the vertical intercept of the consumpation function that represents the portion ofconsumption expenditure not associated with a level of disposable income?a. Consumption interceptb. Disposable income intercept c. Autonomous consumption d. Automatic consumption linewhich of the following occurs when disposable income is zero? Select one: a. consumption is negative b. consumption must be zero c. none of the given options d. saving must be zeroNUMERICAL PROBLEMS Problem (i) Find the equilibrium level of income. (ii) Find the level of consumption. Given the saving function S =- 10 + 0.2y and autonomous investment, I = $ 5 crore. (iii) If investment increases permanently by $ 5 crores, what will be the new levels of income and consumption ?
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