Answer the following questions: Instructions: Enter your answers rounded to the nearest whole number. a. By how much will GDP change if firms increase their investment by $11 billion and the MPC is 0.90? $ billion b. If the MPC is 0.75? $ billion
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Problem 11-03 (algo)
Answer the following questions:
Instructions: Enter your answers rounded to the nearest whole number.
a. By how much will
$ billion
b. If the MPC is 0.75?
$ billion
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- Economics Gross Domestic Product Consumption 100 100 200 160 300 220 400 280 500 340 600 440 Expected Rate of Return Amount of Investment 15% $0 12 40 9 80 6 120 3 160 0 200 Please answer the next 4 questions based on the data in the table above. Also, r = 12%, G = 120, and net exports = 0. 11. The multiplier is equal to ________. 12. Equilibrium GDP = ______. 13. If r increases to 15%, ceteris paribus then equilibrium GDP is now equal to _______. 14. The MPC is equal to _______.. Consumption and Saving are called mirror images of each other. Explain in detail also add MPC and MPS(plagiarism-free)In an economy, income raise by $5000 to $6000 million as a result of 20% rise in investment Calculate the value of investment multiplier
- An increase of $250 million investment in an economy resulted in total increase in income of $1000 million. Calculate the value of multiplier.Consumption and Saving are called mirror images of each other. Explain in detail also add MPC and MPS(plagiarism-free)(detailed answer)ECONOMICS An economy has neither imports nor income taxes. The MPC is 0.75 and the real GDP is $120 billion. The government increases expenditures by $4 billion. The multiplier is _____ and the change in real GDP from the increase in government expenditures is _____ billion.
- An increase of $100 million in investment leads to a rise of $500 million in national income. Find the value of multiplier1. Inventory is: Group of answer choices a. the total amount of goods that a company produces now, regardless of whether they've sold it or not. b. the stock of goods that a company produced last year, but had to sell for below cost. c. the stock of goods that a company produces now, but keeps to sell at a future time. d. the stock of goods that a company produces and sells in a given time perio 2. The four categories of expenditure (spending) in the economy are wages, rent, interest, and profit. Group of answer choices True FalseTrue/False An increase in savings implies a decrease in consumption and therefore a decrease in GDP.
- 11 - : In an imaginary economy, if the disposable income is 200 and the consumption expenditure is 220, what are the savings? a) -20 B) -40 NS) -50 D) -10 TO) -30Aggregate Variables Value (in billions of dollars) in the base year Consumption spending $900 Investment spending $400 Government spending $200 Transfer payments $60 The marginal propensity to save is equal to 0.4 and there are no exports or imports, (a) Calculate the real GDP in this country, Show your work (b) Calculate the marginal propensity to consume Show your work. (c) Suppose that the government increases spending from $200 billion to $300 billion (i) Calculate the maximum change in real GDP. Show your work (ii) Given the change in real GDP in part (c)(i), calculate the maximum level of the new equilibrium real GDP. Show your work (d) Suppose that taxes decrease by $100 billion. Will the maximum change in real GDP be larger than, smaller than, or equal to the change in part (c)(i)? Explain.ABC Computer Company has a $20,000,000 factory in Silicon Valley. During the current year ABC builds $2,000,000 worth of computer components. ABC's costs are labor, $1,000,000; interest on debt, $100,000; and taxes, $200,000. ABC sells all its output to XYZ Supercomputer. Using ABCs components, XYZ builds 4 super computers at a cost of $800,000 each ($500,000 worth of components, $200,000 in labor costs, and $100,000 in taxes per computer.) XYZ has a $30,000,000 factory. XYZ sells three of the supercomputers for $1,000,000 each. At year's end, it had not sold the fourth. The unsold computer is carried on XYZ's books as an $800,000 increase in inventory. Calculate GDP using the expenditure method, the product method and the income method, showing that all three approaches give the same answer.
