Question 19The expenditure lineO is steeper than the 45-degree line.O slopes upward because consumption depends positively on income.O slopes upward because the MPC is less than 1.slopes upward because consumption and investment depend positively on income.O shows the relationship between consumption spending and income.DQuestion 20Between December 2007 and June 2009,the United States economy was in recession and millions of jobs were lost.the United States economy moved upward and millions of jobs were created.the United States economy grew, but not many jobs were created.the United States economy moved downward, but still many jobs were created.the United States economy remained stationary.

Expenditure line is flatter than a 45 degree line. this is because for every increase in disposable…

Answered: The expenditure line is steeper than…

The expenditure line is steeper than the 45-degree line. slopes upward because consumption depends positively on income. slopes upward because the MPC is less than 1.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Suppose that in an economy with no government, the aggregate expenditure function is: AE = 50+0.75Y with an investment level of 100. i) Determine the level of planned expenditure when income is 150.
Suppose investment spending increases by $50 billion and as a result the equilibrium income increases by $200 billion. What is the value of the MPC?
In an economy the marginal propensity to consume is 0.9 and increase in investment is of 100 million dollars. Find out the increase in national income.
Give typing answer with explanation and conclusion
What is the geometric meaning of the MPC?
The following graphs show an economy’s initial position at point A along its consumption function (CF). Suppose disposable income increases. Adjust the following graph by either shifting the consumption function curve or the initial point on the consumption curve (A) to illustrate the impact of an increase in disposable income.
If the level of autonomous expenditures in the economy is $640 b, and the mpe = .8, what is the equilibrium level of GDP? 2
The marginal propensity to consume is typically a. between -1.0 and 1.0 b. between zero and 1.0 c. equal to 1.0 d. less than zero or greater than 1.0 e. equal to zero
Suppose autonomous consumption in an economy is $3 trillion, the MPC is 0.8, government spending is $700 billion, investment equals $600 billion, and net exports equal -100 billion. Calculate the equilibrium output value for this economy.
Assume the base model. If the spending multiplier is 10, then the tax multiplier is 11 10 -9 -8 another value
If the MPC is .6 and the equilibrium GDP is $30 billion below the full employment GDP, then the size of the recessionary expenditure gap is?
Suppose the marginal propensity to consume is 0.8, the marginal propensity to import is 0.2, and autonomous expenditure is 300. What is the equilibrium value of GDP? Answer: