The economic researcher defined the consumption function as follow: C= $600 billion + 0.9Y, a. What is the MPC? b. How large is autonomous C? c. How much do consumers spend with incomes of $4 trillion? d How much de thou coy
The economic researcher defined the consumption function as follow: C= $600 billion + 0.9Y, a. What is the MPC? b. How large is autonomous C? c. How much do consumers spend with incomes of $4 trillion? d How much de thou coy
Macroeconomics: Principles and Policy (MindTap Course List)
13th Edition
ISBN:9781305280601
Author:William J. Baumol, Alan S. Blinder
Publisher:William J. Baumol, Alan S. Blinder
Chapter8: Aggregate Demand And The Powerful Consumer
Section: Chapter Questions
Problem 8DQ
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![Conceptual / Calculation Question
The economic researcher defined the consumption function as follow:
C = $600 billion + 0.9Y,
a. What is the MPC?
b. How large is autonomous C?
c. How much do consumers spend with incomes of $4 trillion?
d. How much do they save?
Now, the economist assumes that the marginal propensity to consume is 0.95,
e. What is the value of the multiplier?
f. What is the marginal propensity to save?
Note: show all the necessary formula and calculations. Less mark(s) will be given if you failed to
show calculation(s)!](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1b5a304d-cdaa-4cf9-aaa5-b7a9f656098d%2F904d5e2b-6654-4178-a116-db16cd76038d%2Fuhk8b6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Conceptual / Calculation Question
The economic researcher defined the consumption function as follow:
C = $600 billion + 0.9Y,
a. What is the MPC?
b. How large is autonomous C?
c. How much do consumers spend with incomes of $4 trillion?
d. How much do they save?
Now, the economist assumes that the marginal propensity to consume is 0.95,
e. What is the value of the multiplier?
f. What is the marginal propensity to save?
Note: show all the necessary formula and calculations. Less mark(s) will be given if you failed to
show calculation(s)!
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