The relationship between MPC and MPS and aggregate output and aggregate income.

Question

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Answer 1

Question

Chapter 8, Problem 1.1P

To determine

The relationship between MPC and MPS and aggregate output and aggregate income.

Expert Solution & Answer

Explanation of Solution

Option (a):

MPC is the marginal propensity to consume which represents that portion of change in income that is consumed or spent.

Option (b):

MPS is the marginal propensity to save which represents that portion of change in income that is saved.

Option (c):

Aggregate output refers to the total quantity of goods and services produced over a given period of time in an economy.

Option (d):

Aggregate income refers to the total amount received by all factors of production in a given time period.

The relationship between MPC and MPS can be established as follows:

Since all the income is either consumed (spent) or saved; MPC+MPS=1 .

The relationship between aggregate output and aggregate income is that both are actually the same thing viewed from different points.

Economics Concept Introduction

Concept introduction:

Marginal propensity to consume (MPC): Marginal propensity to consume refers to the sensitivity of change in the consumption level due to the changes occurred in the income level.

Marginal propensity to save (MPS): The ratio of change in saving when there is a change in disposable income.

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Students have asked these similar questions

3. Consider the market for paper. The process of producing paper creates pollution. Assume that the marginal damage function for pollution is given by: MDF = 3E where damages are measured in dollars and E is the level of emissions. Assume further that the function describing the marginal abatement cost of emissions is given by MAC 120-E where benefits are measured in dollars and E is the level of emissions. a. Graph the marginal damage function (MDF) and the marginal abatement cost function (MAC). b. What is the unregulated level of emissions Eu? What is the social welfare of this emissions level? c. Assume an existing emission quota limits emissions to E = 60. Show on the graph why this policy is inefficient. What is the deadweight loss caused by this policy?

show written calculation for B

Problem 1: 1. If a stock is expected to pay an annual dividend of $20 forever, what is the approximate present value of the stock, given that the discount rate is 5%? 2. If a stock is expected to pay an annual dividend of $20 forever, what is the approximate present value of the stock, given that the discount rate is 8%? 3. If a stock is expected to pay an annual dividend of $20 this year, what is the approximate present value of the stock, given that the discount rate is 8% and dividends are expected to grow at a rate of 2% per year?

Answer 2

Question

Chapter 8, Problem 1.1P

To determine

The relationship between MPC and MPS and aggregate output and aggregate income.

Expert Solution & Answer

Explanation of Solution

Option (a):

MPC is the marginal propensity to consume which represents that portion of change in income that is consumed or spent.

Option (b):

MPS is the marginal propensity to save which represents that portion of change in income that is saved.

Option (c):

Aggregate output refers to the total quantity of goods and services produced over a given period of time in an economy.

Option (d):

Aggregate income refers to the total amount received by all factors of production in a given time period.

The relationship between MPC and MPS can be established as follows:

Since all the income is either consumed (spent) or saved; MPC+MPS=1 .

The relationship between aggregate output and aggregate income is that both are actually the same thing viewed from different points.

Economics Concept Introduction

Concept introduction:

Marginal propensity to consume (MPC): Marginal propensity to consume refers to the sensitivity of change in the consumption level due to the changes occurred in the income level.

Marginal propensity to save (MPS): The ratio of change in saving when there is a change in disposable income.

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Answer 3

Question

Chapter 8, Problem 1.1P

To determine

The relationship between MPC and MPS and aggregate output and aggregate income.

Expert Solution & Answer

Explanation of Solution

Option (a):

MPC is the marginal propensity to consume which represents that portion of change in income that is consumed or spent.

Option (b):

MPS is the marginal propensity to save which represents that portion of change in income that is saved.

Option (c):

Aggregate output refers to the total quantity of goods and services produced over a given period of time in an economy.

Option (d):

Aggregate income refers to the total amount received by all factors of production in a given time period.

The relationship between MPC and MPS can be established as follows:

Since all the income is either consumed (spent) or saved; MPC+MPS=1 .

The relationship between aggregate output and aggregate income is that both are actually the same thing viewed from different points.

Economics Concept Introduction

Concept introduction:

Marginal propensity to consume (MPC): Marginal propensity to consume refers to the sensitivity of change in the consumption level due to the changes occurred in the income level.

Marginal propensity to save (MPS): The ratio of change in saving when there is a change in disposable income.

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Answer 4

Question

Chapter 8, Problem 1.1P

To determine

The relationship between MPC and MPS and aggregate output and aggregate income.

Expert Solution & Answer

Explanation of Solution

Option (a):

MPC is the marginal propensity to consume which represents that portion of change in income that is consumed or spent.

Option (b):

MPS is the marginal propensity to save which represents that portion of change in income that is saved.

Option (c):

Aggregate output refers to the total quantity of goods and services produced over a given period of time in an economy.

Option (d):

Aggregate income refers to the total amount received by all factors of production in a given time period.

The relationship between MPC and MPS can be established as follows:

Since all the income is either consumed (spent) or saved; MPC+MPS=1 .

The relationship between aggregate output and aggregate income is that both are actually the same thing viewed from different points.

Economics Concept Introduction

Concept introduction:

Marginal propensity to consume (MPC): Marginal propensity to consume refers to the sensitivity of change in the consumption level due to the changes occurred in the income level.

Marginal propensity to save (MPS): The ratio of change in saving when there is a change in disposable income.

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Answer 5

Chapter 8, Problem 1.1P

To determine

The relationship between MPC and MPS and aggregate output and aggregate income.

Expert Solution & Answer

Explanation of Solution

Option (a):

MPC is the marginal propensity to consume which represents that portion of change in income that is consumed or spent.

Option (b):

MPS is the marginal propensity to save which represents that portion of change in income that is saved.

Option (c):

Aggregate output refers to the total quantity of goods and services produced over a given period of time in an economy.

Option (d):

Aggregate income refers to the total amount received by all factors of production in a given time period.

The relationship between MPC and MPS can be established as follows:

Since all the income is either consumed (spent) or saved; MPC+MPS=1 .

The relationship between aggregate output and aggregate income is that both are actually the same thing viewed from different points.

Economics Concept Introduction

Concept introduction:

Marginal propensity to consume (MPC): Marginal propensity to consume refers to the sensitivity of change in the consumption level due to the changes occurred in the income level.

Marginal propensity to save (MPS): The ratio of change in saving when there is a change in disposable income.

Answer 6

Chapter 8, Problem 1.1P

To determine

The relationship between MPC and MPS and aggregate output and aggregate income.

Expert Solution & Answer

Explanation of Solution

Option (a):

MPC is the marginal propensity to consume which represents that portion of change in income that is consumed or spent.

Option (b):

MPS is the marginal propensity to save which represents that portion of change in income that is saved.

Option (c):

Aggregate output refers to the total quantity of goods and services produced over a given period of time in an economy.

Option (d):

Aggregate income refers to the total amount received by all factors of production in a given time period.

The relationship between MPC and MPS can be established as follows:

Since all the income is either consumed (spent) or saved; MPC+MPS=1 .

The relationship between aggregate output and aggregate income is that both are actually the same thing viewed from different points.

Economics Concept Introduction

Concept introduction:

Marginal propensity to consume (MPC): Marginal propensity to consume refers to the sensitivity of change in the consumption level due to the changes occurred in the income level.

Marginal propensity to save (MPS): The ratio of change in saving when there is a change in disposable income.

Answer 7

Chapter 8, Problem 1.1P

To determine

The relationship between MPC and MPS and aggregate output and aggregate income.

Answer 8

Expert Solution & Answer

Explanation of Solution

Option (a):

MPC is the marginal propensity to consume which represents that portion of change in income that is consumed or spent.

Option (b):

MPS is the marginal propensity to save which represents that portion of change in income that is saved.

Option (c):

Aggregate output refers to the total quantity of goods and services produced over a given period of time in an economy.

Option (d):

Aggregate income refers to the total amount received by all factors of production in a given time period.

The relationship between MPC and MPS can be established as follows:

Since all the income is either consumed (spent) or saved; MPC+MPS=1 .

The relationship between aggregate output and aggregate income is that both are actually the same thing viewed from different points.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Concept introduction:

Marginal propensity to consume (MPC): Marginal propensity to consume refers to the sensitivity of change in the consumption level due to the changes occurred in the income level.

Marginal propensity to save (MPS): The ratio of change in saving when there is a change in disposable income.

Answer 12

Ch. 8 - Prob. 1.1P Ch. 8 - Prob. 1.2P Ch. 8 - Prob. 1.3P Ch. 8 - Prob. 1.4P Ch. 8 - Prob. 2.1P Ch. 8 - Prob. 2.2P Ch. 8 - Prob. 3.1P Ch. 8 - Prob. 4.1P Ch. 8 - Prob. 4.3P Ch. 8 - Prob. 4.4P

The relationship between MPC and MPS and aggregate output and aggregate income.

The relationship between MPC and MPS and aggregate output and aggregate income.

Explanation of Solution

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