Given a MPC of 0.75, if consumer spending decreases by $300 billion, we would expect RGDP to increase by $1200 billion? True/False

Q: Suppose that the recent economic outlook in the country of Mountainia has been the opposite.…

A: Multiplier = 1/mps                  = 1/0.05                  = 20

Q: If the MPC in an economy is .8, government could close a recessionary expenditure gap of $200…

A: Answer: Given, MPC (Marginal Propensity to consume) = 0.8 Recessionary Expenditure Gap= $200 To find…

Q: Calculate MPS if we know that MPC Is 0.67

A: The information given is the value of Marginal propensity to Consume which is:- 0.67 We have to find…

Q: Assuming no government or foreign sector, if the MPC is 0.5, the multiplier is 1 0.2. 2 0.5. 3 4 5.…

A: MPC is the marginal propensity to consume, given as 0.5

Q: Assume the MPC is 0.8. If government were to impose $20 billion of new taxes on household income,…

A: Given MPC = 0.8 New taxes imposed = $20 billion

Q: If a lump-sum income tax of $30 billion is levied and the MPS is .4, the consumption schedule will…

A: In short, consumption equation C = C + bY shows that consumption (C) at a given level of income (Y)…

Q: If the multiplier is 5, then the MPC is   0.05 0.5 0.6 0.8

A: Macroeconomics discusses economic behavior in an aggregate manner. It explains the economy as a…

Q: Suppose MPC equals 0.9, government taxes 30% of all incomes, and the marginal propensity to import…

A: here we calculate the change in G, by using the relevant given information , so the calculation as…

Q: The value of the Multiplier decreases in only one of the following cases: O An increase in the…

A: Multiplier states the change in the variable due to  change in autonomous Variable.In terms of…

Q: If there is a recessionary gap of $200 Billion and the MPC is .9, how much would government spending…

A: Hi. Since there are two questions, we will solve only the first one. 9. Recessionary gap is given by…

Q: What is the value of the MPC? 0.8 b. Assume now that a lump-sum tax is imposed such that the…

A: (1)  Before-tax: Before-tax, GDP and Disposable income (DI) are the same.  As we can see, every 100…

Q: If the MPC in an economy is 0.80, government could close a recessionary expenditure gap of S80…

A: The marginal propensity to consumer (MPC) refers to the change in the change in the consumption…

Q: Calculate the net cumulative change in aggregate expenditure if taxes were cut by $200 billion and…

A: Multiplier:Multiplier can be calculated as follows:

Q: How much government spending needs to be increased by to maintain full employment in the economy If…

A: *Answer:

Q: If the MPC is 0.8 and government spending decreases by $50 million, then equilibrium GDP will…

A: The equilibrium GDP:The equilibrium GDP can be calculated as follows:

Q: Calculate the net cumulative change in the aggregate expenditure if taxes were cut by $200 billion…

A: Marginal propensity to consume measures the proportion of extra income that is spent on consumption.…

Q: Equilibrium output is 1000, MPC is 1/2 and taxes are zero. Government spending is 20 and net exports…

A: The income equation is given as Y = C+I+G+NX Here consumption is 1/2*Y= MPC which is 1/2*1000= 500…

Q: How much government spending needs to be increased to maintain full employment in the economy if the…

A: Recessionary gap It is the situation when Actual GDP is less than Potential GDP. In order to fill…

Q: If the MPC = 3/5, then the government purchases multiplier is 5/3 5/2 5 1.5

A: Marginal propensity to consume is the proportion of the additional income used for the consumption…

Q: If the MPC in an economy is 0.80, government could close a recessionary expenditure gap of $100…

A: ANSWER     The marginal propensity to consumer (MPC) refers to the change in the change in the…

Q: If the MPC is 0.75, then the multiplier is 4. Select one: True False

A: Given MPC = 0.75 Multiplier = 4

Q: If the MPC in an economy is 0.80, government could close a recessionary expenditure gap of $160…

A: Here, it is given that MPC is 0.8, which implies that an increase in income by 1 percent will lead…

Q: If the MPC in an economy is 0.80, government could close a recessionary expenditure gap of S80…

A: Given data: MPC is 0.80 Expenditure gap is $80 billion

Q: Assume the MPC is 0.80. If government were to impose $200 billion of new taxes on household income,…

A: MPC refers marginal propensity to consume means rise in income of the consumer spend on consumption…

Q: The marginal propensity to save is 0.2. Equilibrium GDP will decrease by $50 billion if the…

A: The Keynesian model would result in the determination of the price level and the real GDP. The…

Q: Assume an MPC of 0.9. The change in total spending for the economy as a result of a $100 billion new…

A: Income is divided between consumption and saving. If MPC is 0.9. This means people of the economy…

Q: What is the effect on savings of a tax cut of $15 billion? Is this inflationary or deflationary?…

A: The marginal propensity to consume (MPC) measures the change in the consumption spending of…

Q: If the value of multiplier is 32 find the MPC and MPS.

A:

Q: MPS is 0.10 B) MPC is 0.90 C) Multiplier is 10 D) All of the above

A: MPS is referred to Marginal Propensity to Save. It is the part of each extra dollar($) of income(Y)…

Q: Calculate MPS when MPC is 0.41

A: # We know that the sum of MPS and MPC is 1 so we have:- MPS + MPC = 1

Q: (simple spending multiplier) for each of the following values for the MPC. Determine the size of the…

A:

Q: The investment multiplier is:     negatively related to the MPS.     positively related to the…

A: The investment function shows the positive relationship between investment and income. It means as…

Q: Assume that in the economy of Utrea, the MPC is 0.8 and the multiplier is 3 and that both government…

A: The gross domestic product (GDP) is the money value of all the newly produced goods and services in…

Q: net taxes were lowered from $5000 to $1000, the MPC is .75, and autonomous consumption spending is…

A: Disposable income refers to the remaining amount after paying all the necessary taxes.

Q: Find the value of multiplier if MPS is 0

A: The information give to us is:- Marginal propensity to save = 0 Multiplier (k) = ? We have to…

Q: 1. The Marginal Propensity to Consume (MPC) is: A. 0.50 B. 0.60 C. 0.70 D. 0.75 2. The Multiplier…

A: Given information  Item Amount Breakeven level of income 450 APS at income level…

Q: As shown in Exhibit 2, dissaving occurs:   Group of answer choices at $5 trillion. between 0 and $4…

A: The 45° line is the GDP or the total output line.  Savings is the portion of income that is not…

Q: Given an economy is currently producing at $1.2T rGDP, natural rGDP is $1.3T, and the MPC is 0.9,…

A: The output produced by the country is less than the potential output so there is a contractionary…

Q: In an economy where the MPC is 0.7, the proportional tax rate is 0.25 and the marginal propensity to…

A: Given :  Marginal Propensity to Consume (MPC) = 0.7 Proportional Tax = 0.25 Marginal Propensity to…

Q: Given an MPC equal to 0.9, a decrease in business investment expenditures by RM25 billion translates…

A: Marginal Propensity to Consume is the proportion of an increase in income that gets spent on…

Q: In the equation AE = $2,000 + 0.8Y, autonomous expenditures are equal to 80 percent of income. [True…

A: Given,  AE = $2,000 + 0.8Y where Y is the income. Autonomous expenditure is the expenditure which is…

Q: Assume that government purchases decrease by $10 billion, with other factors held constant,…

A: The autonomous spending multiplier shows the change in national spending as a result of a change in…

Q: If the multiplier is 10,

A: For finding multiplier we use the formula Multiplier=(1/1-mpc)

Q: he MPS is 0.1 and the income tax rate is 0.33 the multiplier is approximately

A: Given, Marginal Propensity to Save [MPS] = 0.1 Income tax rate = 0.33 The Marginal Propensity to…

Q: Calculating the MPSAnd MPC. In one year a consumer income increase by $200 and her consumption…

A: Income of the consumer split into 2 parts - MPC and MPS , so here we calculate the MPC and MPS which…