23. Assume that Miriam's consumption function is C = a+ b(Yd), where Yd (Y – T) is disposable income, defined as the difference between income Y and taxes T. You observed that, after an increase in taxes T by $80, Miriam's consumption C decreased by $60. If Miriam's income (Y) did not change, you can deduce that her marginal propensity to consume (MPC) is (a) 0.6 (b) 0.75 (c) 0.8 (d) -0.6
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- The Wilson family has a disposable income of $70,000 annually. Currently, the Wilson family spends 80% of new disposable income on consumption. Assume that their marginal propensity to consume is 0.8 and that their autonomous consumption spending is equal to $10,000. What is the amount of the Wilson family's annual consumer spending?Allie has a marginal propensity to consume of 0.75. What does this mean? a. He's spending more than he's making in income b. 75 cents of every additional dollar of his income is saved. c. 75 cents of every additional dollar of his income is spent on consumption. d. 25 cents of every additional dollar of his income is spent on consumption.QUESTIONS GO WITH GRAPH 1. Given this diagram of Consumption and Savings functions, what is the mpc (marginal propensity to consume? 2. Given this diagram of Consumption and Savings functions, What is the level of Ca (autonomous consumption)? 3. Given this diagram of Consumption and Savings functions, What is the level of "induced consumption" at income level of 40?
- If Andrea’s disposable income increases from $600 to $700 and her level of personal consumption expenditures increases from $450 to $475. You may conclude that her marginal propensity to consume is: Group of answer choices 0.5 0.1 0.75 0.25Which one of the following statements relating to marginal propensity to consume is INCORRECT? (a) Marginal propensity to consume for a given consumption function is usually less than 1; (b) If the people in a country save 30c out of every rand they earn, the marginal propensity to consume in this country is said to be 0.7; (c) If the marginal propensity to consume is given as 0.622, then the value of the simple multiplier will be 2.5; (d) The larger the value of the marginal propensity to consume, the steeper the consumption function will be.Given a consumption function, C = c0 + cY, specified such that the marginal propensity to consume is 75%, what will consumption expenditure be if total income is £538bn? a. £584+ c0 bn b. £403.5 + c0 bnc. £538 + c bnd. £403.5 bn
- 1. Induced consumption is: (a) the part of consumption which is independent of the level of income.(b) the minimum level of consumption that is financed from sources otherthan income.(c) The maximum level of consumption that is financed from sources otherthan income.(d) shown by the slope of the consumption function.2. In the Keynesian model, an introduction of a proportional tax will: (a) increase the slope of the consumption function.(b) reduce the multiplier.(c) increase the equilibrium level of income.(d) increase the multiplier.3. A decrease in the price level will: (a) shift the AS curve to the left.(b) shift the AD curve to the left.(c) shift the AS curve to the right.(d) leave both the AD curve and the AS curve unchanged.Assume that marginal propensity to consume is 0.75. autonomous consumption is 100 units (consumption function therefore is as follows: C=100+0.75 Y) . Calculate Multiplier Equilibrium output if Y=100 How much does equilibrium output change if autonomous consumption increases by 50 to 150 units (Hint: use multiplier)What is the eventual effect on real GDP if the government increases its purchases of goods and services by $75,000? Assume the marginal propensity to consume (MPC) is 0.75. $ What is the eventual effect on real GDP if the government, instead of changing its spending, increases transfers by $75,000? Assume the MPC has not changed. $ An increase in government transfers or taxes, as opposed to an increase in government purchases of goods and services, will result in an identical eventual effect on real GDP. no change to real GDP. a larger eventual effect on real GDP. a smaller eventual effect on real GDP.
- In a simple economy (assume there are no taxes, thus Y is disposable income), the consumption function is C = 1000 + 0.8Y. Thus, autonomous consumption is enter your response here and the marginal propensity to consume is enter your response here. A consumer whose income increases by $100 will increase consumption by $enter your response here. Part 2 The saving function in this economy is: S=enter your response here+enter your response here Y.Which of the following statements about consumption is correct? (1) The level of autonomous consumption determines the position of theconsumption function;(2) The marginal propensity to consume determines the position of theconsumption function;(3) The level of autonomous consumption determines the slope of theconsumption function;(4) The level of income determines the slope of the consumption function.consumption function is given by C = 110 + 0.75(Y - T). Planned investment is 300; government purchases is 350. Assume a balanced budget. Graph planned expenditure as a function of What is the equilibrium level of income? If government purchases increase to 400, what is the new equilibrium income? What is the multiplier for government purchases? What level of government purchases is needed to achieve an income of 2,200? (Taxes remain ) What level of taxes is needed to achieve an income of 2,200? (Government purchases remain at )