Inventories typically increase starting at the beginningof recessions, and begin to decline near the end ofrecessions. What does this say about the relationshipbetween planned spending and aggregate output overthe business cycle?

Q: Which of the following would be most likely to increase consumption spending? Select an answer and…

A: Consumption spending refers to the expenditures made by individuals and households on the purchase…

Q: Q-1 The following table shows income and consumption: Calculate: A- Saving (S), B- Marginal…

A: In an economy, the income is earned by all sectors in the economy. This income is either spent on…

Q: 1. Briefly define the following terms and explain the relationship between them: MPC .... .…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: If aggregate expenditures are equal to 15,000, and GDP is 20,000, then unplanned investment is…

A: At equilibrium, Aggregate expenditure is equal to GDP. That means planned expenditure equal to GDP.…

Q: None

A: b. To calculate how many spending cycles would occur before consumer spending increased by $200…

Q: Initital $10 increase in investment expands GDP by $10 in first round of multiplier process. the 2nd…

A: Aggregate Demand: The aggregate demand is a sum of private investment demand, government…

Q: personal consumption expenditures (C) and disposable income (Y d):  Year C Y d 1 300 400  2 500 700…

A: (a)   Given that,   Consumption of year one = 300 Consumption of year two = 500 Income of year one =…

Q: Expenditures 4000 3000 2000 1000 1000 2000 3000 Disposable Income 4000 U U

A: Given graph

Q: 1. Your friend just got an unexpected $1500 tax refund. She plans to put $800 toward paying off…

A: Answer; MPC = Increase in consumption / Increase in income = $100 / $1,000 = 0.1

Q: The following are national Income account data for a hypothetical economy In billions of dollars:…

A: Answer to the question is as follows:

Q: Imagine there is a consumption smoother (also known as a PIH consumer) who expects to live for…

A: Consumption smoothing is also known as as the hypothesis of permanent income. It states that a…

Q: Assume in a simple economy that the level of saving is -500 when aggregate output equals zero and…

A: The MPC is the marginal propensity to consume, which describes the level of income spent on…

Q: The table below provides Income and consumption Data in billions of dollars. Answer questions 21-24…

A: Savings =Disposable Income - Consumption Marginal Propensity to Save (MPS) = Change in Savings /…

Q: Define the term inventories?

A: Inventories refer to the stock of goods of a firm or business.

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

A:

Q: The table below provides income and consumption data in billions of dollars: Disposable Income…

A: The relationship between consumption, saving, and income is often represented by the basic…

Q: Define the term Projected annual net savings?

A: Projected annual savings means the estimated annual cost savings projected to be produced by a…

Q: o inventories change when aggregate planned expenditure is less than Peal GDP? regate planned…

A: Inventories are the unplanned investment. Firms plans to investment, but if actual investment is…

Q: spending multiplier is smaller the: greater the change in the price level that follows a spending…

A: The multiplier is an economic concept that measures the overall impact on an economy resulting from…

Q: Using the income-expenditure model, what is the expected effect (increase, decrease, or no effect)…

A: Income-expenditure method: It refers to the model under which the fluctuations and spending are…

Q: 25. Which one of the following statements is INCORRECT? A The level of autonomous consumption is…

A: Autonomous consumption: - autonomous means independent therefore, autonomous consumption is that…

Q: Given the data shown in the table below, if planned investment increased by $100, the new…

A: GDP is the value of all final goods and services produced in an economy over a given period of time.…

Q: If inventories unexpectly rise, then production ______________ sales and firms will respond by…

A: If there is a rise in the inventories, it will be quite evident to the firms that they are producing…

Q: The marginal propensity to save is 0.1. Equlibrium GDP will decrease by $30 billion if the aggreate…

A: MPC = 1-0.1 = 0.9  Therefore, the marginal propensity to consume is 0.9 Now, calculate multiplier =…

Q: Assume a simple closed economy without exports and imports. autonomous consumption expenditure is 50…

A: In the Keynesian theory when the price level in the economy is assumed to be fixed then equilibrium…

Q: Consider the bl owing information for a closed economy. Consumption 400 +0.6(Y-T) Таxes 500…

A: Answer: Tax multiplier: it refers to the ratio of change in income to the change in taxes. In other…

Q: Consider a country with the national income of $300 billion, the amount of taxes paid by households…

A: Keynes has proposed increasing government spending during times of recession and economic…

Q: Which of the following would be most likely to increase consumption spending? Selected answer…

A: The objective of the question is to identify which of the given scenarios would most likely lead to…

Q: Which of the following would not increase consumption spending? O Decreased disposable income.…

A: Consumer spending or consumer expenditure refers to the total amount the consumer is spending on the…

Q: e current a Country is 39,600 but the full employment GDP is considered to be $10,000. The marginal…

A: The equilibrium is reached when aggregate demand is equal to aggregate supply. There will be a…

Q: Data on before-tax income, taxes paid and consumption spending (on domestic goods and services) for…

A: Autonomous consumption is individuals' or households' baseline level of spending on essential goods…

Q: Using the table below, answer the following question: Real GDP ConsumptionPlanned (Y) GovernmentNet…

A:

Q: For a country the marginal propensity to consume is 0.75, the country has increased investment this…

A: Investment multiplier which refers to the change or increase in income as a result of increase in…