An increase in planned investment causes :Select one a. output to decrease, but by a smaller .amount than the decrease in investment .b. output to increase c. output to decrease, but by a larger .amount than the decrease in investment d. output to decrease by an amount equal to .the decrease in investment
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- . If the consumption function in an economy as follows C = 50 + 0.75Y and the following variables fixed at investment = 250 MD Government expenditure = 200MJD, Net exports = 200MJD, so the equilibrium income is equal Options are 3800,2800,1800,4800. Don't copy previous question becuase it is wrong?During recessions declines in investment account for abouta. 1/6 of the decline in real GDP.b. 1/3 of the decline in real GDP.c. 1/2 of the decline in real GDP.d. 2/3 of the decline in real GDP.During recessions which type of spending falls?a. consumption and investmentb. investment but not consumptionc. consumption but not investmentd. neither consumption nor investment
- Yd Consumption Expenditure $ 0 $ 4,000 $ 10,000 $ 12,000 $ 20,000 $ 20,000 $ 30,000 $ 28,000 $ 40,000 $ 36,000 $ 50,000 $ 44,000 Calculate equilibrium level of income if autonomous Investment of $6,000 was made.b. Explain the difference between saving and investment as defined by a macroeconomist. c. Which of the following situations in c (i) & c (ii) represent investment? Saving? Explain(i) Your family takes out a mortgage and buys a new house. (ii) You use your paycheque to buy stock in Sagicor Financial Services.a. Looking at business fixed investment, explain why investment is negatively related to the interest rates.b. Using the Tobin’s q theory, explain the relationship between investment and capital stock?
- “Permanent Income of consumption is just the average of all current and future incomes. Thus, one does not need to do the maximisation of intertemporal utility”. True or False. Discuss according to the model. Note that you need to discuss according to the model?a) how much is the autonomous consumption in the economy and investment should be increased to achieve an income of RM400 million? b)calculate the MPS and derive the consumption c)how much investment should be increased ti achieve an income of rm400 millionEquation for consumption is C=40/(0.8Y) where Y= yearly income = $400. A) what is the level of consumption B) what is the average propensity to consume
- 1. The marginal propensity to consume is:A) the change in consumption divided by the change in income.B) consumption divided by income.C) the change in consumption divided by the change in saving.D) The change in saving divided by the change in income.Assume a closed economy where the level of investment is 300 and savings function is s = -30+ 0.15y calculatr the equilibrium level of incomeA movement along the consumption function can be caused by aa. check from sold mutual funds.b. well performing stock market.c. decrease in taxes.d. newly found $100,000 inheritance.