he full employment level of GDP is 470 the current level of GDP output is 430. Income is 430 and consumption is 420 income increases to 450 and consumption increases to 435. What will the MPC be What will the MPS be What will the multiplier be How much and in what direction will spending need to change to regain the full employment level of GDP How much and in what direction will taxes need to change to regain the full employment level of GDP You must show all work you must take all steps and it must be done in a neat well organized easy to follow manner

Q: Suppose that business executives are very optimistic, and they raise their investment spending. What…

A: Keynesianism, due to its potential to ease economic downturns through government involvement, gained…

Q: The table below provides Income and consumption Data in billions of dollars. Answer question below…

A: Here, the given table shows the consumption level at different income levels in an economy.

Q: When the MPC increases: a. the government spending multiplier stays the same b. the government…

A: The marginal propensity to consume refers to that portion of the increased income that was spent by…

Q: If GDP is $3,400 billion, the multiplier is 5, and I rises by 15, what is the new level of GDP? The…

A: GDP is the value of final goods and services produced in the economy within a given period of time.

Q: Suppose the marginal propensity to consume (MPC) is either 0.75, 0.96, or 0.62.   a. For each…

A: GDP shows total market value that produced within a country in a specific time period .GDP is used…

Q: Consider the hypothetical country of Pelee. Suppose that national income in Pelee is $30 billion,…

A: In the given question we are given with,national income(Y)= $30 billiontax(t)= $10 billion,…

Q: For this question, you should draw the AS/AD diagram on your own paper, and use your diagram to find…

A: If there is an increase in government spending and no decrease in spending by anyone else, it would…

Q: Aggregate expenditure is 790. Income is 730 and consumption is 720, income increases to 750 and…

A: Investment can be calculated as follows: Aggregate…

Q: Income and Expenditure Work It Out: Question 4 of 4 Recall that the consumption function is C = $100…

A: Equilibrium in the economy is reached where planned aggregate spending is equal to income.

Q: Graph the following situation. Suppose the economy is in a recessionary gap and GDP is in…

A: A multiplier is a term used in economics to describe an economic factor that, when increased or…

Q: If the MPC in an economy is .8, government could close a recessionary expenditure gap of $200…

A: Answer: Given, MPC (Marginal Propensity to consume) = 0.8 Recessionary Expenditure Gap= $200 To find…

Q: Multiplier Effect a. During a recessionary gap, is the goal to increase or decrease the equilibrium…

A:

Q: If an economy’s spending multiplier is equal to 4, what is its MPC and MPS?

A: The marginal product of consumption (MPC) measures the change in consumption due to a change in…

Q: Aggregate Expenditures 800 600 400 200 0 15 04 Income Refer to the above graph to answer this…

A: Aggregate demand is the sum of consumption, investment, government spending and net export. This…

Q: Given the necessary increase in GDP of $360 and the MPC of 0.70, how much should we reduce taxes to…

A: The multiplier value depends on the marginal propensity consume. The higher the value of MPC ,…

Q: Q.1 DISTINGUISH BETWEEN INCOME AND DISPOSABLE INCOME Q.2 HOW DO TAXES AFFECT THE LEVEL OF AGGREGATE…

A: A person who works for a living is known to earn an amount of money that is known as income. This…

Q: If MPC in an economy is 0.73 and consumption spending increases by $1,172, what will overall GDP…

A: MPC is the marginal propensity to consume which is the percentage of change in consumption spending…

Q: If you spend $100 and the MPC is 0.9, how much will total GDP rise because of this spending of  $100…

A: In an economy, any change in spending by the people of a country has the multiplier impact on the…

Q: The diagram below is a representation of the aggregate expenditure model in a hypothetical economy.…

A: It is given that the initial GDP is 112 millions from the diagram. The given change in aggregate…

Q: Suppose the MPC is 0.8. The government wants to decrease Total Spending by $600. How should it…

A: MPC=0.8 Total Spending=$600 Multilplier= Change in Y/Change in G=1/1-MPC 600/Change in G=1/1-MPC

Q: Potential GDP C+1+G+X-IM) ,00 5,000 6,000 Real GDP (billions of dollars per year) In Figure 11-1,…

A: Recessionary gap is when Real GDP is less than potential GDP.

Q: The basic idea behind the multiplier is that an increase in GDP brings about an additional, larger…

A: Let I0 , G0 , and NX be the autonomous investment, government spending and net export of an economy…

Q: Which of the following graphs shows the correct effect on the consumption function when taxes…

A: Macroeconomic research provides a comprehensive forecast for the fiscal landscapes of entire…

Q: Suppose that consumption is 70 million and disposable income is 350 and that the economy is…

A: A recessionary GDP gap refers to when natural GDP is higher than actual GDP. This implies actual GDP…

Q: U 1 2 point Suppose a country's MPC is 0.75. If the government increases taxes, causing disposable…

A: Marginal propensity to consume shows how consumption changes as income changes.

Q: Suppose an economy can be represented by the following table, in which employment is in millions of…

A: GDP measures the monetary value of final goods and services—that is, those that are bought by the…

Q: how do we connect the MPS, MPC, spending multiplier and total change?

A: The multiplier effect describes the impact of an initial change in spending or investment on the…

Q: How do budget surpluses and budget deficits affect the consumption and investment components of GDP

A: The budget surplus is a situation where the revenue of government exceeds the spending of the…

Q: The government of a country decides to double its current level of spending, causing real GDP to…

A: Gross domestic product (GDP): - GDP is the market value of all final goods and services produced in…

Q: 800 REAL EXPENDITURE (Billions of dollars) 500 400 X 300 200 Potential GDP 700 600 100 100 45-degree…

A: The summation of countries' goods and services produced is called its gross domestic product.  GDP…

Q: With an MPC of 0.8, government spending increases $20 billion while taxes decrease $10 billion.…

A: The effect of increase in government spending can be seen as: Multiplier: 11-MPC=11-0.8=5 The…

Q: Explain how the multiplier affects equilibrium real GDP. Give examples

A: When talking about multiplier in economics, it can be said that it is the change in one variable due…

Q: The Finance Minister in Canada asked a policy analyst the following question "what value can the…

A: Multiplier refers to the economic factor that when changed cause change in the many other related…

Q: K Use the information in the table to answer the following questions. All numbers are in billions of…

A: The Gross domestic product is a country's final value of goods and services in a year. GDP is a…

Q: Suppose that the MPC is .75 and the MPM is .1.  What is the size of the multiplier?

A: MPC refers to Marginal Propensity to Consume. It is the proportion of the additional income which…

Q: If GDP is 3,900, the multiplier is 8, and G falls by 10, wha New GDP is $ billion.

A: Multiplier effect shows that the change in GDP will be greater than the change in spending that has…

Q: suppose that the was experiencing a recession and the government inject R50 billion, resulting in a…

A: Consumption is the sum of autonomous consumption and consumption dependent on income. Disposable…

Q: 1. If imports are $2 trillion, exports are $1.9 trillion, consumption is $3.8 trillion, investment…

A: The objective of the first two questions is to calculate the Gross Domestic Product (GDP) using the…

Q: If the investment increases by 185 and the national income increases by 1200 billion what would be…

A:

Q: The figure shows the flows of expenditure and income in an economy. In 2013, Uwas $1.0 trillion,…

A: We are given that U (G) = 1 trillion (Government spending)  V = 2.5 trillion ( Private Saving) W or…

Q: In an economy the change in income is $2300 and change in investment is $700   What will be the…

A: We know that investment multiplier can be calculated as  Investment multiplier = change in income /…

Q: Real GDP Consumption Planned Investment Government Purchases Net Exports $5,000 $4,500 $500…

A: Economy is at equilibrium when aggregate supply is equal to aggregate demand (AD=AS).

Q: The table below shows data for three fictitious countries. a. Compute the current MPC for each…

A: MPC is the ratio of change in consumption to change in income. It shows how much of the income is…