Refer to Table 24.6. The value of the government spending multiplierA. is 10.B. is 5.C. is 0.9.D. cannot be determined from the available information. ### Economic Data TableThis table provides comprehensive data related to Output (Income), Net Taxes, Consumption Spending, Savings, Planned Investment Purchases, and Government Spending. The table is designed for students to understand the relationships between these economic variables.#### Table Columns and Values- **Output (Income)**: The total income or production output of the economy. It ranges from 2,400 to 3,800 in increments of 200.- **Net Taxes**: A fixed amount of taxes subtracted from the income, which is consistently 100 across all levels of Output.- **Consumption Spending**: The amount of income spent by consumers, based on the consumption function $ C = 100 + 0.9Yd $. Where $ Yd $ is disposable income $ Y $ (Income) minus Net Taxes. - For example, at an Output of 2,400, $ Yd = 2300 $, so Consumption $ C = 100 + 0.9 \times 2300 = 2170 $.- **Savings**: The portion of income that is saved. This is calculated implicitly as the difference between disposable income and consumption spending. - Savings for an Output of 2,400 is: $ 2400 - 100 - 2170 = 130 $ - **Planned Investment Purchases**: A fixed amount set at 130 across all income levels.- **Government Spending**: An additional expenditure role taken by the government, fixed at 200 for all income levels.#### Detailed Breakdown of Table Data1. **Output (Income): 2,400** - Net Taxes: 100 - Consumption Spending: 2,170 - Savings: 130 - Planned Investment Purchases: 130 - Government Spending: 2002. **Output (Income): 2,800** - Net Taxes: 100 - Consumption Spending: 2,530 - Savings: 170 - Planned Investment Purchases: 130 - Government Spending: 2003. **Output (Income): 3,000** - Net Taxes: 100 - Consumption Spending: 2,710 - Savings: 190 - Planned Investment Purchases: 130 - Government Spending: 2004. **Output (Income): 3

The spending multiplier in economics refers to the concept that an initial increase in spending can…

Answered: Refer to Table 24.6. The value of the…

Refer to Table 24.6. The value of the government spending multiplier A. is 10. B. is 5. C. is 0.9. D. cannot be determined from the available information.

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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Question

Refer to Table 24.6. The value of the government spending multiplier A. is 10. B. is 5. C. is 0.9. D. cannot be determined from the available information.

### Economic Data Table

This table provides comprehensive data related to Output (Income), Net Taxes, Consumption Spending, Savings, Planned Investment Purchases, and Government Spending. The table is designed for students to understand the relationships between these economic variables.

#### Table Columns and Values

- **Output (Income)**: The total income or production output of the economy. It ranges from 2,400 to 3,800 in increments of 200.

- **Net Taxes**: A fixed amount of taxes subtracted from the income, which is consistently 100 across all levels of Output.

- **Consumption Spending**: The amount of income spent by consumers, based on the consumption function $ C = 100 + 0.9Yd $. Where $ Yd $ is disposable income $ Y $ (Income) minus Net Taxes.
- For example, at an Output of 2,400, $ Yd = 2300 $, so Consumption $ C = 100 + 0.9 \times 2300 = 2170 $.

- **Savings**: The portion of income that is saved. This is calculated implicitly as the difference between disposable income and consumption spending.
- Savings for an Output of 2,400 is: $ 2400 - 100 - 2170 = 130 $

- **Planned Investment Purchases**: A fixed amount set at 130 across all income levels.

- **Government Spending**: An additional expenditure role taken by the government, fixed at 200 for all income levels.

#### Detailed Breakdown of Table Data

1. **Output (Income): 2,400**
- Net Taxes: 100
- Consumption Spending: 2,170
- Savings: 130
- Planned Investment Purchases: 130
- Government Spending: 200

2. **Output (Income): 2,800**
- Net Taxes: 100
- Consumption Spending: 2,530
- Savings: 170
- Planned Investment Purchases: 130
- Government Spending: 200

3. **Output (Income): 3,000**
- Net Taxes: 100
- Consumption Spending: 2,710
- Savings: 190
- Planned Investment Purchases: 130
- Government Spending: 200

4. **Output (Income): 3

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