If aggretate exppenditure is greater than total income:     investment will decrease because such a high level cannot be sustained.     planned savings will decrease in line with investment.     output will increase to replenish depleted inventories.     investment will decrease to run down excessive inventories.     there is an error, since the two are same by definition

Q: With the help of a diagram, explain the derivation of the TotalRevenue curve.

A: Total Revenue Total revenue refers to the sum of all goods and services sold. It is computed by…

Q: If the marginal prospensity to consume is 0.75, an increase in autonomous investment of 800.00 will…

A: Venture multiplier is a commitment of J.M Keynes. Keynes accepted that an underlying expansion in…

Q: Explain the relationship between MPL and MC

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Q: Find MPC if MPS = 0.8

A: Given: Marginal propensity to save (MPS) = 0.8

Q: Consider an increase of investment of $1.5 billion. Assume the economy' s marginal propensity to…

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Q: Y-2VF-8 VY+2 Suppose the savings function of a country is S = and savings (S) are measured in…

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Q: Planned Aggregate Expenditure (PAE) Y₁ Y₂ Y3 Actual Aggregate Expenditure (Output or GDP, Y) If…

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Q: Can MPC be negative or greater than 1? Why or why not

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Q: Which is considered a leakage or withdrawal of spending from the income expenditures stream?     A)…

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Q: Calculate autonomous spending with the given info C = 400 + 0.6Y

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Q: Consider the economy of Janus represented by the following information: Marginal Propensity to…

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Q: 15 and G = 17. Consumption, as you would expect, does depend on income via the nsumption function C…

A:

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Q: As shown in Exhibit 8-2, the marginal propensity to consume (MPC) is:

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Q: Domestic Output or Income (GDP = DI) $ 540 560 580 600 620 640 660 Consumption $ 540 555 570 585 600…

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Q: Question 21.21  Which of the following goods (with their respective income-elasticity coefficients…

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Q: "Your research into a nation has yielded the following information: Autonomous expenditure (A) =…

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Q: If PAE is greater than Y, we expect: Multiple Choice there will be no change in inventories. the…

A: Answer - Need to find- If PAE is greater than Y, we expect Evaluating the options:- there will be…

Q: Calculate the value of MPC. The value of MPS is given to be as 0.95

A: # Sum of MPC and MPS together taken gives 1 MPC+MPS = 1