The fluctuations in the income level that result from changes in investment spending     depend only on the magnitude of the changes in investment spending but not on the size of the MPC     tend to be larger if the income tax rate (t) is larger     tend to be larger with a larger MPC     tend to be larger the larger the marginal propensity to import     tend to be larger with a larger MPS

Q: An initial increase in investment spending will generate: Less of an increase in income…

A: The amount of desired investment would rise as a result of an increase in investment, which would…

Q: Level of investment goes up by 200. What happens with the level of GDP if you know that MPC = 0,8…

A: It is given that MPC=0.8 t=0.1

Q: If the MPC in an economy is .8, government could close a recessionary expenditure gap of $200…

A: Answer: Given, MPC (Marginal Propensity to consume) = 0.8 Recessionary Expenditure Gap= $200 To find…

Q: Calculate the value of the hvestment multiplier when MPC is given 0.90

A:

Q: he transfer payments multiplier is ________ than the government purchases multiplier because some…

A: Government spending multiplier = 1 / (1-MPC) Transfer payment multiplier = MPC / (1-MPC) Where MPC…

Q: Find Multiplier if the value of MPC is 0.65

A: The data presented in the question above is:- Marginal propensity to consume = 0.65  Multiplier is…

Q: If marginal propensity to save is 0.22  Calculate the value of k(Multiplier)

A: We are given with the value of marginal propensity to save as:- MPS = 0.22 Multiplier = k  = ?

Q: If you spend $100 and the MPC is 0.9, how much will total GDP rise because of this spending of  $100…

A: In an economy, any change in spending by the people of a country has the multiplier impact on the…

Q: What happens to GDP if the investment icreases by 100 with MPC = 0,8 and tax 20%?

A: Given: Investment level increases by = 100 MPC = 0.8 Tax = 20% To Find: The GDP level:

Q: Find the value of the multiplier when the MPS equals to 0.70

A: Formula:  Multiplier = 1/(1-MPC)  MPC = 1- MPS

Q: If the MPC is 0.9 what will happen to GDP if the government cut spending bt S2.

A: Given data: MPC, c=0.9Government spending, G=$2

Q: How much of a change in GDP will result if firms increase their level of investment by $8 billion…

A: To determine the change in GDP resulting from an increase in investment, we can use the concept of…

Q: Will an economy with a high multiplier be more stable or less stable than an economy with a low…

A: In economical aspects, a multiplier extensively alludes to a monetary factor that, when expanded or…

Q: Suppose the marginal propensity to consume is 0.75, the marginal propensity to import is 0.25, there…

A: Aggregate expenditure is the sum of all spending made by all sector of the economy.  It includes…

Q: If MPC was equal to 0.5, would doubling your income double your consumption spending

A: The marginal propensity to consume (MPC) refers to the incremental change in income that is consumed…

Q: ppose that autonomous consumption is 50, government purchases are 125, planned investment spending…

A: Aggregate expenditure is the sum of consumption, investment, government spending and net exports in…

Q: 1) If investment spending depends on GDP, this is called induced investment? T/F 2) A change in…

A: When a good is manufactured with the use of factors of production, cost  takes place for producing…

Q: A. Suppose the country of Freelandia has an MPC of .85 and a real GDP of $200 billion. If its…

A: Keynesianism has made strides in its ability to solve economic downturns by government intervention,…

Q: Using taxes as a function of income, derive and explain the investment multiplier

A: Y = C + I + G  C :- consumption  I :- Investment  G :- Government expenditure  C = C0 + c Yd Yd is…

Q: If the value of investment multiplier is 1 what will be the value of MPC

A: The information being provided is:- Investment multiplier = 1 MPC = ? We have to find the value of…

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

A:

Q: If marginal propensity to save is 0.1 Find the value of multiplier

A: The information being given to us is as follows:- Marginal propensity to save = 0.1 We need to find…

Q: If the MPC is​ .75, the government spending multiplier is

A: The government spending multiplier is the amount by which a change in government spending affects…

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: The table below shows data for three fictitious countries. a. Compute the current MPC for each…

A: MPC is the ratio of change in consumption to change in income. It shows how much of the income is…

Q: If the MPC is 0.9 what will happen to GDP if the government cut spending bt $2.

A: ∆Y = 11-c∆G where Y = GDP            c = MPC            G = government spending

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: When marginal propensity to consume is 0 the value of investment multiplier will be 1 True/False

A: We are given that the value of Marginal propensity to consume is 0 MPC calculate the change in…

Q: If the autonomous expenditure by the government increases by 7000 and the MPC is 0.2 find the level…

A:

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: If the government expenditures decrease by 100 million Euro and the aggregate demand decreases by…

A: MPC is the marginal propensity to consume.  MPC shows a particular percentage of disposable income…

Q: The value of Marginal propensity to consume is double the value of Marginal propensity to save.…

A: We are given with the following information:- The value of MPC is double that of MPS I.e MPC = 2MPS…

Q: When investment multiplier is 1, the value of marginal propensity to consume is 0

A: # We know that the investment multiplier is given as:- = 1/ ( 1-MPC)  And also it can be written as…

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: The potential GDP of the country is 380 billion euros, and the actual is 240. The marginal…

A: The potential GDP is the GDP which is maximum or resources are used fully. economy reaches the full…

Q: Suppose that in an economy with no government, the aggregate expenditure function is: AE = 50+0.75Y…

A: The aggregate expenditure function is the graphical representation of planned expenditure in the…

Q: Suppose investment spending increases by $50 billion and as a result the equilibrium income…

A: "Marginal propensity to consume" is referred to as MPC. It is a way to gauge how much of a…

Q: If the level of autonomous expenditures in the economy is $640 b, and the mpe = .8, what is the…

A: Marginal Propensity to Expand (MPE): MPE refer to the proportion of an additional unit of income…

Q: If the value of multiplier is 32 find the MPC and MPS.

A:

Q: Assume a model where marginal propensity to save is 0.2, the marginal propensity to import is 0.1…

A: MPS refers to the rate of change in savings with respect to rate of change in income .

Q: overnments attempt to stimulate economies by offering firms temporary investment tax credits.…

A: Tax credits are the subsidy in taxes provided by the government.

Q: Why can’t an economy with a MPC greater than one reach a stable equilibrium in the aggregate…

A:

Q: If the economy has an MPC equal to 0.80 and is currently $800 million below its full employment…

A: Aggregate demand is the sum of Consumption , Investment, government spending and net export.  At…

Q: If in an economy MPC is 0.8 and investment increase by $5 billion. How much there is an increase in…

A: The marginal propensity to consume = 0.8 Increase in investment = $5 billion

Q: Please answer the following questions based on the given information: a = 50, MPC -0.8, 1-100,…

A: Aggregate demand is the sum of Consumption, Investment, government spending and net export.…