5) If an increase in investment spending of $50 million results in a $400 million increase in equilibrium real GDP, then A) the multiplier is 0.125. B) the multiplier is 3.5. C) the multiplier is 8. D) the multiplier is 50.
Q: If the marginal propensity to save is low a. The spending multiplier will be reduced b.…
A: In an economy, the marginal propensity to save refers to the amount of additional income that is…
Q: 1. Compute the MPS and the MPC
A: Note: In the BNED Guidance, only the first question can be answered at a time. Resend the question…
Q: If taxpayers are known to save 7% of any additional money they receive, and to spend 93%, how much…
A: I am answering this according to a $10 tax cut as you have mentioned both $8 and $10 in the…
Q: If an increase in investment spending of $50 million by Amgen, a biomedical company, results in a…
A: Expenditure multiplier shows the effect of an initial increase in autonomous spending on total…
Q: the multiplier coefficient is 5, by what amount does real GDP output have to increase or decrease in…
A: Aggregate expenditure is sum of consumption spending, investment spending, government purchases and…
Q: If a $200 billion increase in investment spending creates $200 billion of new income in the first…
A: ∆Y=160 billion ∆I=200billion K=∆Y/∆I =160/200 =0.8 So mpc=0.8
Q: a. The following information is a three sector economy of a Consumption function (C) = 310 +…
A: (Q) The following information is a three-sector economy of a Consumption function (C) =…
Q: Is the relationship between changes in spending and changes in real GDP in the multiplier effect a…
A: The marginal propensity to consume is a statistic that quantifies induced consumption, which…
Q: In economics, the multiplier effect refers to the fact that when there is an injection of money to…
A: The tax multiplier is the ratio of the change in output with respect to the change in taxes. The…
Q: The multiplier is related to the marginal propensities. The MPC is (directly, inversely) related to…
A: The multiplier is related to the marginal propensities. The MPC is directly related to the size of…
Q: What is the multiplier effect? What relationship does the MPC bear to the size of the multiplier?…
A: The multiplier effect as the name suggests multiplies something or is a response to a change in some…
Q: Given the following information: C = 10,000 + 0.60Yd Ip = 110,000 G = 60,000 M = 20,000 X = 15,000 T…
A: Formula for MPS is MPS = 1 - MPC Formula for equilibrium income is Y = C + I + G + X - M
Q: Japan increases investment by 12 billion. The magnitude of multiplier is 6. Calculate MPC
A: Rise in investment = 12 billion Multiplier = 6 MPC = ?
Q: The autonomous expenditure multiplier that has the highest value is: a) the net exports…
A: multiplier is used to determine how much an initial change in the variable affect output. . The…
Q: Assume that the MPC is 0.70. What is the income multiplier? Question 46 options: a) 0.3 b)…
A: MPC + MPS = 1 Where MPC is the marginal propensity to consumer MPS is the marginal propensity to…
Q: Autonomous consumption = R100m Investment spending = R300m Government spending = R200 million…
A: Meaning of Money Multiplier: As from the word, the money multiplier refers to the situation under…
Q: If an increase in investment spending of $20 million results in a $200 million increase in…
A: An investment is an asset or item acquired for the purpose of generating income or valuation. The…
Q: 47)Which one is TRUE? Select one: a. The larger the MPC, the smaller the multiplier. b. The…
A: The formula for multiplier stated in the textbook overstates the real world multiplier when we take…
Q: Consider the following information about an economy. C=100+b(Y-50-0.25Y); I=50, G=50, X=10,…
A: The equilibrium income reflects that level of income where the aggregate expenditure is equal to the…
Q: Question 52 ( Which of the following combination will have the highest multiplier? Mpc - 0.90 t=…
A: The economies tend to have various entities, which are in the form of households, firms, investors,…
Q: b. What will the multiplier be given the MPC values below? Fill in the table with your answers.…
A: Answer: (a). The formula of the multiplier in terms of MPS is given below: Multiplier=1MPS MPS…
Q: What would happen to the multiplier if the MPC were to fall? The multiplier would stay the same The…
A: Multiplier refers how much time money multiplied in market it depend on the level of consumption ,…
Q: C= 500 + 0,8Y, tax rate(t)= 0,25, G=1000 ve I= 1200. X= 500, M= 500 + 0,1Y. Calculate the…
A: In an economy, the investment multiplier explains the change in the income level due to changes in…
Q: Refer the table below and answer the questions that follow. Aggregate Output ($ million) Y…
A:
Q: Q) Consider the multiplier model (in which the only component of expenditure that depends on income…
A: A multiplier depends on the economic parameter that, if improved or modified, induces several other…
Q: n an economy investment increases by 120 crores. The value of multiplier is 4. Calculate the…
A: Increase in investment = 120 crores. Value of multiplier = 4
Q: What is a multiplier? How does the multiplier effect occur? Please provide examples of at least…
A: The term multiplier is a widely used term in macroeconomics. It measures the amount by which…
Q: In economics, the multiplier effect refers to the fact that when there is an injection of money to…
A: Given, The initial amount = $8 billion Taxpayer save = 11% Spend = 89% That is,…
Q: ind the value of multiplier when the value of MPS is 0.891
A: Initially in the question, We have to find the value of multiplier = ? MPS = 0.891
Q: If the marginal propensity to consume (MPC) increases. A. The MPS increases B. The multiplier…
A: here we can find the correct answers as follow-
Q: Consider a hypothetical closed economy in which households spend $0.70 of each additional dollar…
A: The overall demand for all services and goods in an economy is known as "aggregate demand". Consumer…
Q: Assume that the Marginal Propensity to Consume (MPC) is 0.8. If the multiplier effect is taken into…
A: When Government expenditure will decreases it decreases the consumption as well so it reduce the…
Q: As the marginal propensity to consume (MPC) increases, As the marginal propensity to save (MPS)…
A: The formula is given as: Multiplier = 1/ (1-MPC) or 1/MPS
Q: If changes to expenditures include consumption at $2000, investment at $600, government spending at…
A: Here, given information is: Consumption: 2000 Investment: 600 Government spending: 500 Exports: 100…
Q: Which of the following statements is TRUE?
A: The value of spending multiplier is dependent on MPC and as well as MPS
Q: Explain the multiplier intuitively. Why is it that an increase in planned investment of $100 raises…
A: Multiplier is when some variables changes due to some other variables. For example money multiplier.…
Q: If the multiplier is 4 and real GDP increases by $520 billion, the increase in investment spending…
A: Investment multiplier refers to the concept that any increase in investment spending has a more than…
Q: Calculate the value of Multiplier if change in income is $2300 and the change in investment is $700
A: The data presented in the question above:- Change in income = $2300 Change in investment = $700 The…
Q: Suppose that investment demand increases by $100. Assume that households have a marginal propensity…
A: MPC is 80% which symbolizes that a rise of 1$ in the income will lead to a $0.80 rise in…
Q: If we observe that every increase in income of $120 million generates an increase in consumption of…
A: Given: The increase in income is = $120 million The increase in consumption = $80 million To Find:…
Q: If a $2000 increase in income leads to an $1600 increase in consumption expenditures, then the…
A: consumer income is split in two parts MPC and MPS here we calculate the following as follow-
Q: a=$250b, I=$500b, G= $350b, MPC=80%; Calculate: the multiplier the equilibrium level of income
A: The multiplier value depends on the value of the marginal propensity to consume. Higher the MPC,…
Q: In an economy income increases by 10,000 as a result of a rise in investmen expenditure by 1,000.…
A:
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- If an increase in investment spending of $50 million results in a $400 million increase in equilibrium real GDP, then O A. the multiplier is 0.125. B. the multiplier is 3.5. C. the multiplier is 8. D. the multiplier is 50.1. If an increase in investment spending of $20 million results in a $200million increase in equilibrium real GDP, thenA. the multiplier is 10.B. the multiplier is .1.C. the multiplier is 100.D. the multiplier is 1.If an increase in investment spending of $50 million by Amgen, a biomedical company, results in a $400 million increase in equilibrium real GDP, then what is the expenditure multiplier? Select one: a. the multiplier is 0.125. b. the multiplier is 3.5. c. the multiplier is 8. d. the multiplier is 50.
- An economy has a marginal propensity to consume of 0.5, and Y*, the income-expenditure equilibrium GDP, equals $500 billion. Given an autonomous increase in planned investment of $10 billion, answer the following questions. a. What is the value of the multiplier? Value of the multiplier = b. What would you expect the total change in Y* to be based on the multiplier formula? Change in Y* based on the multiplier = billion c. What is the total change in real GDP after the 10 rounds? It may be beneficial to make a table on a separate sheet of paper to calculate the change in real GDP for each of the rounds, and then add up the values. Total change in real GDP (10 rounds) =If a $200 billion increase in investment spending creates $200 billion of new income in the first round of the multiplier process and $160 billion in the second round, the multiplier in the economy is 5. 4. 3.33. 2.5.Q) Consider the multiplier model (in which the only component of expenditure that depends on income is consumption), and suppose that investment expenditures decrease by $50 million. All else equal, then the spending-balance level of output will A) increase by $50 million B) decrease by $50 million C) decrease by more than $50 million D) decrease by less than $50 million Explain it early and correctly
- If national income now rises by £22 billion and as a result, the consumption of domestically produced goods rises to £80 billion. Calculate the marginal propensity to consume (MPC)What is the value of the multiplier? What is the value of the multiplier? Comment on the results in part (3) and (4).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 )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 ) Please answer 4 and 5
- The following information is a three sector economy of a Consumption function (C) = 310 + 0.6Yd Investment multiplier (I) = 200 Government expenditure (G) = 170 Tax (T) = 180 iv. At the equilibrium level, compute the value of average propensity to consume (APC) v. If tax increase to RM200, derive consumption function after taxSuppose that investment demand increases by $100. Assume that households have a marginal propensity to consume of 80 percent. Compute the first three rounds of multiplier effects as follows: a) What are the first cycle changes in spending? Total cumulative change equals? b) What are the second cycle changes in spending? Total cumulative change equals? c) What are the third cycle changes in spending? Total cumulative change equals?Q) Consider the multiplier model (in which the only component of expenditure that depends on income is consumption), and suppose that investment expenditures decrease by $50 million. All else equal, then the spending-balance level of output will A) increase by $50 million B) decrease by $50 million C) decrease by more than $50 million D) decrease by less than $50 million Solve it correctly