Principles of Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134421315
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 22, Problem 4.2P
To determine
Identify the consumption functions that best fits the given values.
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Refer to the information provided in Table 8.8 below to answer the questions that follow.
Table 8.8
Aggregate Output Aggregate Consumption Planned Investment
($ million)
3,000
4,000
5,000
6,000
7,000
($ million)
2,000
2,800
3,600
4,400
5,200
($ million)
1,600
1,600
1,600
1,600
1,600
Refer to Table 8.8. Which of the following statements is false?
Select one:
O a. The MPCfor this economy is o.8.
O b. lfaggregate output equals $4,00o million, then aggregate saving equals $1000 million.
c. At an output level of $3,000 million, there is a $600 million unplanned inventory decrease.
O d. At an output level $4,000 million, there is a $400 million unplanned inventory decrease.
Consider the data presented in the table:
Actual
aggregate
expenditure
or output Consumption Planned
(Y)
(C)
(billions
(billions
of $)
of $)
500
300
600
350
700
400
800
450
900
500
Unplanned
Government Net investment
spending exports (inventory
(NX) change)
investment (G)
(billions (billions (billions (billions
of $)
of $)
of $)
of $)
100
-100
-50 S
ol C
150
150 C
150 S
150 C
150 C
100
100 C
100 C
100 C
Based on the assumptions of the aggregate expenditure model, fill in the
columns for planned investment, government spending, and net exports.
Instructions: Enter the values into the table above.
50
50 €
50 C
50 S
50 S
a. For each level of actual aggregate expenditure, calculate unplanned
inventory investment.
correct.
Instructions: Enter the values into the table above. If the value is negative, then
be sure to enter a minus sign.
b. What is the equilibrium level of aggregate expenditure in this economy?
Instructions: Enter a number rounded to the nearest whole number.
Answer is…
Given the scatter diagram in Figure 8-1, what is the MPC (your best estimate)?
a.
1
b.
2/3
c.
1/2
d.
1/3
I know the answer of this question
answer is 2/3 but can you please give the explanation how 2/3 is the answer of the problem
Chapter 22 Solutions
Principles of Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (12th Edition)
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