Given Co = 400 and MPC = 0.70. Find Consumption when Yd = 2000 and when Yd = 3000. b) Given the consumption levels you found in part a), calculate Savings for both these levels of disposable income and consumption c) Calculate MPS d) Prove that MPS + MPC = 1 e) If autonomous consumption increases by $50. What is the multiplier? What is the change in total spending? f) Draw a diagram to show the effect of the multiplier in the economy? [Hint: What shifts and how?] Kindly answer this question correctly and type the answer here. Don’t give a handwritten answer on a page. And please answer it in 15 minutes. I will give you a thumbs up.
Given Co = 400 and MPC = 0.70. Find Consumption when Yd = 2000 and when Yd = 3000. b) Given the consumption levels you found in part a), calculate Savings for both these levels of disposable income and consumption c) Calculate MPS d) Prove that MPS + MPC = 1 e) If autonomous consumption increases by $50. What is the multiplier? What is the change in total spending? f) Draw a diagram to show the effect of the multiplier in the economy? [Hint: What shifts and how?] Kindly answer this question correctly and type the answer here. Don’t give a handwritten answer on a page. And please answer it in 15 minutes. I will give you a thumbs up.
Chapter18: The Keynesian Model
Section: Chapter Questions
Problem 7SQ
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a) Given Co = 400 and MPC = 0.70. Find Consumption when Yd = 2000 and when Yd = 3000.
b) Given the consumption levels you found in part a), calculate Savings for both these levels of disposable income and consumption
c) Calculate MPS
d) Prove that MPS + MPC = 1
e) If autonomous consumption increases by $50. What is the multiplier? What is the change in total spending?
f) Draw a diagram to show the effect of the multiplier in the economy? [Hint: What shifts and how?]
Kindly answer this question correctly and type the answer here. Don’t give a handwritten answer on a page. And please answer it in 15 minutes. I will give you a thumbs up.
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