The multiplier process depicted in the following table is based on a Marginal Propensity to Consume (MPC) of 0.75.a. Recompute the first four cycles using an MPC of 0.80.| Spending Cycles | MPC = 0.75 | | MPC = 0.80 | ||-----------------|------------|---------------------|------------|----------------------|| | Change in | Cumulative Increase | Change in | Cumulative Increase || | Spending | in Spending | Spending | in Spending || | during | | during | || | Cycle | | Cycle | || | (billions per year) | (billions per year) | (billions per year) | (billions per year) || 1 | $100.00 | $100.00 | $100.00 | [Blank] || 2 | 75.00 | 175.00 | [Blank] | [Blank] || 3 | 56.25 | 231.25 | [Blank] | [Blank] || 4 | 42.19 | 273.44 | [Blank] | [Blank] |b. Given that the MPC is higher, how much more consumption occurs in the first four cycles when the MPC = 0.80 as compared to when the MPC = 0.75?[Blank] billionc. What is the value of the multiplier? - (i) if MPC = 0.75? [Blank] - (ii) if MPC = 0.80? [Blank]Explanation:- The table shows the process of calculating the change and cumulative increase in spending over four spending cycles with different MPC values.- For MPC = 0.75, spending begins at $100 billion and decreases in each cycle, with a cumulative total of $273.44 billion by the fourth cycle.- You need to complete the table for MPC = 0.80 and answer the questions regarding the additional consumption and multiplier values.

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

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In Utopia (a country with substantial excess resources), consumers spend 70% of their incomes and save 30%; the country spends 30% of GDP on imports and the government typically takes 10% of household incomes in taxation.a) What is the value of the multiplier?Last year, the Utopian Government spent 5Bn Utopian Dollars on current expenditure; Utopian households spent 0.5Bn Utopian Dollars in “autonomous consumption” and Utopian enterprises sold goods and services worth 10 Bn Utopian dollars to other countries. Utopian investors spent 15Bn Utopian dollars in maintaining and enhancing the country’s capital equipment.b) What was the value of GDP last year?c) What was the value of the Utopian Government’s budget surplus or deficit last year?d) How would the value of the multiplier (in 2(a) change if Utopia was a closed economy (so zero imports)?e) If the Utopian economy were already at its potential GDP (ie its full -employment GDP), what would happen to the value of the multiplier?
refer to figure 23.6. if aggregate income is $1,000, aggregate consumption is Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
If the spending multiplier is 10, a S100 increase in government spending and Sl00 increase in taxes, will cause a inerease in GDP by 0 100 900 $1,000
The table shows disposable income and saving in an economy. Calculate consumption expenditure at each level of disposable income. Over what range of disposable income is there dissaving? Estimate the level of disposable income at which saving is zero. >>> Answer to 1 decimal place. Disposable income 0 (trillions of dollars) Saving 10 20 30 40 53--35 50 5 When disposable income is $30 trillion, consumption expenditure is $ trillion.
1.12 Study the following diagram and answer the question that follows. Expenditures (billions of dollars per year) > > 3500 3000 2500 2000 1500 1000 500 Figure 9.1 500 1000 1500 2000 2500 3000 3500 Income (billions of dollars per yazari At an income level of $2,000 billion, a) Consumption equals $1,500 billion. b) Saving equals $0. c) The MPC equals 0.80. d) There is dissaving. F 뉴 C connex
If changes to expenditures include consumption at $2000, investment at $600, government spending at $500, exports are $100, imports are $200 and the mpc is 0.75, then: the equilibrium income is $12,000 equilibrium income is $3000 the multiplier is 5 the slope of the AE curve is 0.25
Aggregate Income, Aggregate Consumption, Aggregate Saving, The value of the MPC is (Round your response to one decimal place.) Y C S $0 $200 $-200 100 250 -150 200 300 -100 300 350 -50 400 400 0 500 450 50 600 500 100
Question Aggregate expenditure is the total amount of spending in the economy that determines the level of the GDP. Components of aggregate expenditure are autonomous expenditure, planned private investments, government expenditure, and net exports. When autonomous expenditure increases or decreases, it has a multiplied effect on the GDP. Referring to the 10-year historical period that you chose for your final project, discuss an example of a change in autonomous spending. Research a government policy implemented during that time and discuss the multiplier effect it had on the economy. I have choosen 1980-1989 in the US. **This is not a research paper - it's just a quick brief for a discussion board**
5:06 A & & & P M Page 4 of 5 QUESTION 4 The figure below shows the planned Aggregate Expenditure function for a hypothetical economy (AEp = 1,000 + 0.5 * Y). In this economy, taxes and transfers are equal to zero, so YD =Y. What is the value of unplanned investment expenditure (Iµ) when GDP = 3,000? Suppose that, next period, autonomous consumption increased by 100 and every thing else remained the same. Under these new circumstances, what would the value of unplanned investment be when GDP = 3,000? 5,000 4, 500 4, 000 3, 500 3,000 AEp = 1,000 + 0.5*Y 2, 500 2000 1, 500 1,a00 500 500 1,000 1, 500 2,000 2 500 3,000 3,500 4,000 4,500 5,000 REAL GDP Page 5 of 5 QUESTION A5 a. Suppose that some kind of significant economic event has occurred, and you learn that the event will de finitely cause the aggregate price level to decrease, but that its effect on short-run equilibrium real GDP cannot be determined without knowing the exact PLANNED AGGREGATE EXPENDITURE
give answer woith explaantion
The nation's disposable income increases by 400 billion in as a result consumer spending increases by 220 billion therefore the MPC equals what
In an economy investment increases by 120 million. The value of multiplier is 4. Calculate MPC.

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