Assume that GDP increases by 1. Then consumption will.... Select one: a. ... increase by the marginal propensity to consume b. ... increase by 1 minus subsistence consumption C. ... increase by an unknown amount d. increase by 1
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Assume that GDP increases by 1. Then consumption will....
Select one:
a. ... increase by the marginal propensity to consume
b. ... increase by 1 minus subsistence consumption
C. ... increase by an unknown amount
d. increase by 1
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Solved in 2 steps
- What is the vertical intercept of the consumpation function that represents the portion ofconsumption expenditure not associated with a level of disposable income?a. Consumption interceptb. Disposable income intercept c. Autonomous consumption d. Automatic consumption lineWhich of the following will increase the slope of the demand curve in the goods market to indicate an increase in the level of output and income? Select one: a. An increase in autonomous investment. b. An increase in the marginal propensity to consume. c. An increase in government spending. d. An increase in taxation.Clearly explain the characteristics of the consumption function.
- For the y axis, why is it labeled income and not consumption outputIf preferences for pizza increase and the price of labor to produce pizza decreases, the equilibrium quantity of pizza will ____ and the equilibrium price of pizza will _____ . increase, increase decrease, be indeerminate increase, be indeterminate increase, decrease Assume an intertemporal budget constraint that shows how consumption can be traded off between two periods, t and t+1. Assume the consumer can save and borrow at the same interest rate of 10%. Assume the consumer collects income of $100 in each period. To gain an extra $10 dollars in period t+1, what must the consumer give up in period t? $11 $9.10 $1 $10 A convex indifference curve implies what type of behavior? diminishing marginal utility complementary goods perfect substitutes inferior goodsThe consumption demand function merely states that as income goes up, households consume all their increased income
- Assume that a nation's marginal propensity to consume (MPC) is 0.75. A highiy productive, cost-cutting technology is developed for the production of commercial airplanes. The total industry expenditure in this nation is $100 million for the immediate acquisition and adoption of this technology. (a) For this nation, identify and explain how much this spending on new technology will change each of the following in the first round: i. Income (GDP) L. Saving i. Consumption (b) Assuming a closed economy and no leakages, identify and explain how much this spending on new technology will change each of the following at the end of the final round: i. Income (GDP) ii. Saving li. ConsumptionFor a given household, the value of change in consumption is $2500 and the change in income is $6200 What would be the value of Marginal propensity to Consumea) With the aid of a consumption function, highlight the main determinants of consumption.
- The marginal propensity to consume is typically a. between -1.0 and 1.0 b. between zero and 1.0 c. equal to 1.0 d. less than zero or greater than 1.0 e. equal to zeroWhich of the following will not tend to shift the consumption schedule upward?Select one:a. A currently small stock of durable goods in the possession of consumers. b. The expectation of a future decline in the consumer price index.c. A currently low level of household debt.d. The expectation of future shortages of essential consumer goods.The marginal propensity to consume for this economy is …………. if income rises from $9000 to $10000 and consumption is rises from $750 to $1500 0.650. 0.750. 0.650 or 0.664, depending on whether income is $10,000 or $11,000. 0.800.