The multiplier process depicted in the following table is based on an MPC of 0.75.a. Recompute the first four cycles using an MPC of 0.80.MPC = 0.75MPC = 0.80Change inSpending duringCycleCumulativeIncrease inChange inSpending duringCycleCumulativeIncrease inSpendingSpending CyclesSpending(billions per year) (billions per year)(billions per year) (billions per year)1$100.00$100.00$100.00275.00175.00356.25231.25442.19273.44b. Given that the MPC is higher, how much more consumptionoccurs in the first four cycles when the MPC = 0.80 ascompared to when the MPC = 0.75?billionc. What is the value of the multiplier(i) if MPC = 0.75?(ii) if MPC = 0.80?

Spending Cycles Change in Spending during cycles Cumulative increase in spending 1 $100 $100 2…

Answered: The multiplier process depicted in the…

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

What will the multiplier be when the MPS is 0, 0.4, 0.6, and 1? What will it be when MPC is 1, 0.90, 0.67, 0.50, and 0? How much of a change in GDP will result if firms increase their level of investment by 8 billion and the MPC is 0.80? If the MPC instead of 0.67?
Assume that a nation's marginal propensity to consume (MPC) is 0.75. A highiy productive, cost-cutting technology is developed for the production of commercial airplanes. The total industry expenditure in this nation is $100 million for the immediate acquisition and adoption of this technology. (a) For this nation, identify and explain how much this spending on new technology will change each of the following in the first round: i. Income (GDP) L. Saving i. Consumption (b) Assuming a closed economy and no leakages, identify and explain how much this spending on new technology will change each of the following at the end of the final round: i. Income (GDP) ii. Saving li. Consumption
Consider an economy of a nation that has the following aggregate expenditure. 1300- 1040- 780- 520- AE 260 Y = AE 260 390 520 650 780 9ło 1040 1170 1300 130 Real GDP Note: Please make sure your final answers are accurate to 2 decimal places. a) What is the value of the equilibrium national real GDP? Equilibrium = $0 b) What is the value of the multiplier? Multiplier = 0 c) If the autonomous consumption were to decrease by $520, what would be the new value of equilibrium real GDP? New equilibrium = S0 Aggregate expenditures
Given an economy is currently producing at $1.2T rGDP, natural rGDP is $1.3T, and the MPC is 0.9, then the multiplier for increases in aggregate expenditures is: 10 A (whole number, no decimals). This means the federal government should increase its expenditures by A (whole number) billion dollars.
The multiplier process depicted in the following table is based on an MPC of 0.75. Instructions: Round your responses to two decimal places. a. Recompute the first four cycles using an MPC of 0.94. Spending Cycles $ 6A 1 2 3 4 Change in Spending during Cycle (Billions per Year) $100.00 75.00 56.25 42.18 billion 4 MPC = 0.75 i. if the MPC = 0.75? c. What is the value of the multiplier Cumulative Increase in Spending (Billions per Year) $100.00 175.00 231.25 273.44 ii. if the MPC = 0.94? b. Given that the MPC is higher, how much more consumption occurs in the first four cycles when the MPC is 0.94 compared to when the MPC is 0.75? MPC -0.94 Change in Spending during Cycle (Billions per Year) $100.00 $ $ $ Cumulative Increase in Spending (Billions per Year) $ $ 94.00 88.36 $ 83.05 $ 100.00 194.00 282.36 365.41
The multiplier 15) If the consumption function is C = $800 billion + 0.8Y (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?
The multiplier process depicted in the following table is based on an MPC of 0.75. a. Recompute the first four cycles using an MPC of 0.95. MPC = 0.75 MPC = 0.95 Spending Cycles Change in Spending Cumulative Increase Change in Spending Cumulative Increase during Cycle in Spending during Cycle in Spending (billions per year) (billions per year) (billions per year) (billions per year) 1 $100.00 $100.00 $100.00 2 75.00 175.00 56.25 231.25 4 42.18 273.44 b. Given that the MPC is higher, how much more consumption occurs in the first four cycles when the MPC = 0.95 as compared to when the MPC = 0.75? billion c. What is the value of the multiplier (i) if the MPC = 0.75? (ii) if the MPC = 0.95?
The full employment level of GDP is 470 the current level of GDP output is 430. Income is 430 and consumption is 420 income increases to 450 and consumption increases to 435. What will the MPC be What will the MPS be What will the multiplier be How much and in what direction will spending need to change to regain the full employment level of GDP How much and in what direction will taxes need to change to regain the full employment level of GDP You must show all work you must take all steps and it must be done in a neat well organized easy to follow manner.
Consider the following economy. What is the mpc in this economy? Planned Government Net Exports Aggregate Change in Real GDP (Y) Consumption (C) Investment (I') Purchases (G) (NX) Expenditures (AE) Inventories 10000 8200 800 11000 9000 600 12000 9800 13000 14000 15000 800 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 0.50 b 0.75 C 0.80 d 0.90
If an economy were already at its potential GDP (ie its full-employment GDP), what would happen to the value of the multiplier? please help asap thank u

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS