Households change their spending by $10 billion due to a decrease in net wealth. The country's marginal propensity to consume is 0.8. What impact will this have on real GDP? O Consumption spending will increase by $10 billion Investment spending will decrease by $50 bilion O Consumption spending will increase by $50 billion O Consumption spending will decrease by $50 billion Consumption spending will decrease by $10 billion O oooO

Households change their spending by $10 billion due to a decrease in net wealth. The country's marginal propensity to consume is 0.8. What impact will this have on real GDP? O Consumption spending will increase by $10 billion Investment spending will decrease by $50 bilion O Consumption spending will increase by $50 billion O Consumption spending will decrease by $50 billion Consumption spending will decrease by $10 billion O oooO

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consumption expenditure (trillons of 2012 dollars) 25 45° line 20 15 Consumption funccion 10 E ua n e 10 15 20 Disporable income (crillions of 2012 dollars) 14
QUESTION 47 An increase in the marginal propensity to consume (MPC) O a. increases the multiplier, so that changes in government spending have a larger effect on aggregate expenditure (aggregate demand). O b.increases the multiplier, so that changes in government spending have smaller effect on aggregate expenditure (aggregate demand). O c. decreases the multiplier, so that changes in government spending have a larger effect on aggregate expenditure (aggregate demand). O d. decreases the multiplier, so that changes in government spending have a smaller effect on aggregate expenditure (aggregate demand).
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.
A Moving to another question will save this response. estion 14 When C lg = GDP in a private closed economy, S= lg and there are no unplanned changes in inventories O A. true. O B, false. >A Moving to another question will save this response.
The aggregate expenditure curve shows the relationship between aggregate planned expenditure and Select one: A. consumption expenditure. O B. real GDP. C. the price level. D. the interest rate. O E. disposable income.
1.The marginal propensity to consume in this economy is 2.The equilibrium level of output in this economy is
The closed economy of Sokovia has a GDP of 150 billion dollars and a marginal propensity to save of 02. In the closed economy of Madripoor the GDP is 160 billion dollars and the marginal propensity to save is 0 25 We can infer that 6. Select one answer: O It takes Sokovia an injection of 10 billion dollars to reach a GDP of 200 billion dollars O The multiplier in Madripoor is 6. O The multiplier in Sokovia is 4. O It takes Madripoor an injection of 12 billion dollars to reach a GDP of 200 billion dollars.
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
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QUESTION 6 Potential GDP Aggregate expenditure AE, 45° Y. Real GDP (Y) When real GDP is greater than Yo in the diagram above: O A. - inventories will decrease OB. ·Aggregate expenditure will be less than Real GDP OC. Aggregate expenditure will be equal to Real GDP OD. O D. inventories will increase QUESTION 7 Y G Xn $1,000 $1,400 1,400 1,400 1,400 1,400 $0 $800 -$200 2,500 5,000 7,500 10,000 2,300 3,800 5,300 6,800 1,000 1,000 1,000 1,000 -200 -200 -200 -200 Suppose you are given the data in the table above for a hypothetical economy. All data are in billions of dollars. Yis actual real GDP, and C, Ip, G, and Xn are the consumption, planned investment, government purchases, and net exports components of aggregate expenditures, respectively. Calculate the equilibrium GDP (give your answer in billions of $) Aggregate Expenditure
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