The distance between illustrates an inflationary expenditure gap.

Q: Name four differences between the Keynes and Fishers model of consumption

A: These are the four differences between the Keynes and Fisher's Model of consumption:

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

A: Consumption smoothing:- A stable trajectory for consumption is what is meant by the economic…

Q: Criticize Keynes in two points on the equality between savings and investment.

A: The Keynesian model assumes that in the short run the prices of the goods are constant and the…

Q: Identify the equilibrium level of income given Y=1000; C=850; I=100 AE=? solve for the AE?

A: Given, Y=1000 C=850 I=100

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

A: Equilibrium is achieved at a point where the amount of injections is equal to the amount of…

Q: Discuss characteristics of an economy that helps itself correct from a recessionary gap

A: A gap of recession is created when an economy's current output goes short of its potential output.…

Q: A change in the price level will cause a shift in the expenditure schedule.  True or  False

A: Answer to the question is as follows :

Q: The government decides to levy a lump-sum taxes by $50 billion which will reduce disposable income.…

A: Lump sump tax A lump-sum tax is a type of taxation that is based on a fixed amount rather than the…

Q: An overheated economy is most likely to result in: price stability high inflation stagflation…

A: A country's economy often overheats when supply is less than the demand. The price of goods and…

Q: What effect has the hand sanitiser market during COVID had on Australia's GDP?

A: During the COVID pandemic demand for sanitizers increased explicitly which as a result caused the…

Q: Given the b=mpc=.8, and Yf-Ye=400, how much government spending is necessary to close the…

A: Government spending or expenditure includes all government consumption, investment, and transfer…

Q: In an economy, when the PAE= 400 +.5Y, the income- expenditure multiplier equals:

A: A macroeconomic term known as an income-expenditure multiplier quantifies the effect of changes in…

Q: Which of the following components of consumption spending typically sees the largest decline in…

A: A recession is a time of financial compression rather than development. During such periods, the…

Q: Definition of expenditure control measure

A: Expenditure can be defined as the payments made for the purchase of any goods or services where…

Q: Which among the following is the credit instrument Cheques All the given choices Coins Omani Riyals…

A: Bank: It has a license for receiving deposits and making loans.

Q: The maginal propensity to consume of country is 0.8 and the country increases its investment by 5…

A: Marginal Propensity to Consume  (MPC) = 0.8 Change in investment = 5 billion

Q: Explain the relationship between consumption and saving in the Keynesian model.

A: The total expenditure within the economy and its consequences on output, employment, and inflation…

Q: Average propensity to consume refers to the ratio of _________ expenditure to the corresponding…

A: When a household earns income then this income can be either consumed or saved. The measure of…

Q: Calculate income if Average propensity to consume is 0.77 and the consumption is $400

A: The economics as a study is based upon the idea that the societies tend to have a limit to the…

Q: If income is $1000 and consumption expenditure is $1200 then find the average propensity to save.

A: Given data: Income Y=$1000 Consumption C=$1200

Q: How to calculate marginal propensity to save

A: The marginal propensity to Consume is the metric that quantifies the induced consumption of the…

Q: False : A recessionary gap can be caused by consumers who spend more than the

A: Recessive gap. Occurs when real GDP (more than full employment) falls below potential GDP, which…

Q: In our modern economy, the adjustment process necessary to eliminate a recessionary gap is very…

A: The adjustment process implies a self-adjustment mechanism through price adjustment. This…

Q: We call the model of income determination  a Keynesian . What makes it Keynesian, as opposed to…

A: In economics, there are two popular school of thoughts: classical and Keynesian. The classical…

Q: Producers will change their prices when GDP is at the equilibrium level.  True or  False

A: Gross Domestic Product is the sum total amount of goods and services produced in the economy at a…

Q: Expenditures that would exist at a zero level of income are called induced expenditures:  True or…

A: There are two types of expenditure : Induced expenditure and Autonomous expenditure  Induced…

Q: What will be the value of average propensity to consume if income of household is $1350 and the…

A: The data presented in the question above is:- Income of household = $1350 Consumption done by…

Q: If income is $1000 and consumption expenditure is $1200 then find the average propensity to save

A: The provided information are: Income (Y) = $1000 Consumption (C) = $1200

Q: A futures market trades contracts on the growth rate for nominal GDP. The contract pays $X to the…

A: Given information: A future market trades contracts on the growth rate for nominal GDP. The contract…

Q: Calculate multiplier if MPC is 0.77

A: The formula and calculation: Multiplier =11-MPC=11-0.77=4.34782609=4.35

Q: In the 1960s the U.S entered the Vietnam War, and military expenditures (p

A: (c) Tax multiplier = -MPC / (1-MPC) => Tax multiplier = -0.75/ (1-0.75) => Tax multiplier =…