If consumption is $8 billion when disposable income is $0, and if the marginal propensity to consume is 0.60, find the national consumption function  C(y)  (in billions of dollars).

Q: An economy is in equilibrium. Find Marginal Propensity to Consume from the following: National…

A: The provided information are: National income (Y) = 2000 Autonomous consumption (a) = 400 Investment…

Q: Businesses in the nation of Islandia have been accumulating cash because they have a pessimistic…

A: [a] Multiplier = 1/(1-MPC)                       = 1/(1-0.75) = 4 Change in GDP ($billion ) =…

Q: What is the relationship between the marginal and average propensity to consume in the standard…

A: Solution: 1. Keynes is the most influential economists of the 20th century. Among many other things,…

Q: If investment falls by $5 billion and the marginal propensity to consume is 0.75. So Real GDP Group…

A: Here, given information is, Change in investment spending: -$5 billion Marginal propensity to…

Q: Calculate average propensity to consume if disposable income is $4300 and the consumption level is…

A: According to the above given question, we are given with the following information:- Disposable…

Q: Given the marginal propensity to consume (MPC) = 0.6 + 0.1/√Y and the autonomous consumption (c) =…

A: Given  Marginal propensity to consume (MPC) = 0.6 + 0.1/√Y Autonomous consumption (c) = 45 When…

Q: value of MP S is 0.25 what is the value of marginal propensity to consume.

A: Formula:  Marginal propensity to consume = 1-Marginal propensity to save

Q: Question 3. Using the Keynesian-cross analysis, assume that the consumption function is given by C =…

A: In the Keynesian model, Aggregate demand means demand for a goods or services by all the people in…

Q: the two parts of the keynesian consumption function are consumption that depends on and consumption…

A: The Keynesian consumption function shows the relationship between the national income and the total…

Q: According to the Keynesian cross model, if the marginal propensity to consume is 3/4, an increase in…

A: when Government spending is increases income level in the market will be rise because government…

Q: The Canadian Government decides to inject $10,000,000 into the economy by increasing its spending…

A: Change in GDP = change in spending x multiplierMultiplier – 1/MPSMPC + MPS = 1MPC + MPS = 1.6 + MPC…

Q: If the marginal propensity to consume (MPC) is 0.90, a $100 increase in taxes imposed by the…

A: The marginal propensity to consume (MPC) is the proportion of income spent on consumption. The gross…

Q: In the Keynesian cross, assume that the consumption function is given by C = 200 + 0.75 (Y - T).…

A: Government purchase: The money that is spent by the government for procuring goods or services from…

Q: If the marginal propensity to consume increases, we should expect that

A: GIVEN   If the marginal propensity to consume increases, we should expect that Is

Q: As shown in Exhibit 8-2, the marginal propensity to consume (MPC) is:

A: Consumption function can be written as -  C=a+bY, where a = autonomous consumption and b = MPC =…

Q: ​If the marginal propensity to consume of an economy is 0.7, then the simple spending multiplier is:

A: Marginal propensity to save is defined as that proportion of the aggregate increase in income which…

Q: The change in output following a change in autonomous expenditure is known as the: (a)  Investment…

A: The term multiplier refers to the effect by which an increase in autonomous expenditure leads to an…

Q: If the consumption function lies above the 45-degree line, then saving at these levels of disposable…

A: Consumption refers to the expenditure done by households on the purchase of final goods and…

Q: Troll Island is a small island nation that recently experienced an autonomous change in aggregate…

A: The term “multiplier” is defined as the measure of the amount by which the equilibrium level of…

Q: When investment multiplier is 1, the value of marginal propensity to consume is 0

A: # We know that the investment multiplier is given as:- = 1/ ( 1-MPC)  And also it can be written as…

Q: In the Keynesian model the multiplier is equal to (4 marks) A The equilibrium level of output for a…

A: Option (C).

Q: Suppose the marginal propensity to consume equals 0.7 (i.e., c1 = 0.7). Given this information,…

A: Aggregate equilibrium in closed economy is given by , Aggregate demand = Aggregate Output  where,…

Q: If the multiplier is 4 and the investment function is: I=200. What is the value of the marginal…

A: please find the answer below.

Q: Q.1.7 In the Keynesian macroeconomic model, the equation for the savings function is given as: S =…

A: The saving function, often known as the inclination to save, describes the link between saving and…

Q: Which of the following features of a Keynesian consumption function is not true? a. In the short…

A: The aggregate real consumption expenditure of an economy is a function of real national income,…

Q: omplete the statements and then calculate the change in consumption. Options: disposable income…

A: C =C +bYdWhere C is consumptionb is mpc ( marginal propensity to consume )Yd is Disposable incomeC…

Q: In the simple Keynesian consumption function C = 84 +0.83*Y^d, what is the marginal propensity to…

A: Consumption function is a sum of autonomous and induced consumption. Autonomous consumption is…

Q: If the Marginal Propensity to Consume (MPC) is 0.6, then the expenditure multiplier must be: Group…

A: Aggregate demand is the total or final demand for goods and services in the country at a given…

Q: If the Keynesian goods market multiplier is 2 and investment declines by €100 billion, then…

A: GDP is the value of final goods and services produced in the economy within a given period of time.

Q: Sum of average propensity to consume and marginal propensity to consume is always equal to 1.  True…

A: # Marginal propensity to consume is given by the ratio of change in consumption and change in…

Q: In the Keynesian-cross analysis, if the consumption function is given by C=100+0.6(Y-T),and planned…

A: In an economy, the Keynesian equilibrium is when aggregate expenditure equates to income level.

Q: Consumption ($) Disposable Income ($) 1,200 3,200 2,100 4,000 3,000 4,800 Calculate the Marginal…

A: In economics, the marginal propensity to consume is a metric that quantifies induced consumption,…

Q: The marginal propensity to consume is Select one: a. never bigger than 1 b. equal to disposable…

A: In financial matters, the marginal propensity to consume is a metric that evaluates prompted…

Q: If the consumption function is of the form C = 80 + 0.4Yd, the MPS equals Select one: A. -0.6. B.…

A: 1) Given, C = 80 + 0.4Yd, MPC = 0.4 We know that, MPC + MPS = 1 MPS = 1 - MPC MPS = 1 - 0.4 = 0.6 2)…

Q: What is the Marginal Propensity to Consume (MPC) when income and consumption increase to 450 and 315…

A: MPC = 0.5

Q: If the marginal propensity to consume (MPC) is .90 estimate the total (multiplied) effect of…

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

Q: Consider a Keynesian model where: exports = R10 million the marginal propensity to import out of…

A: According to the question above, it is given that : Exports = R 10 million Marginal propensity to…

Q: If consumption is $5 billion when disposable income is $0 and if the marginal propensity to consume…

A: Consumption function: It means the relationship between consumption and disposable income.

Q: Consider an economy described by the following: Autonomous consumption ( a ) = 100 Autonomous…

A: Consumers spend a part of their disposable income on consumption, while the other part of the income…

Q: The fact that marginal propensity to consume (MPC) is larger than 0 means that  a. Consumption will…

A: Marginal propensity to consume is the percentage of change in consumption spending due to percentage…

Q: In the Keynesian model, the consumption function is C = 0.8(Y - T), planned investment I is equal to…

A: In a closed economy, the planned aggregate expenditure is the sum of consumption, investment, and…

Q: Q.1.8 If the marginal propensity to consume increases: (1) The slope of the consumption function…

A: Marginal propensity to consume is the change in consumption that occurs due to the change in income.…

Q: If the marginal propensity to consume is 0.6 then the marginal propensity to save must be 0.4.   1.…

A: Given information: Marginal propensity to consume= 0.6 Marginal propensity to consume (MPC) is the…

Q: What level of government purchases is needed to achieve an income of 1,600?

A: The equation for the macroeconomic equilibrium in the economy is as follows: Y=C+I+G+NX where, C…

Q: In the  Keynesian  cross, assume  that  the  consumption  function is  given by C =  200  + 0.75  (Y…

A: Given  Consumption function C=200+0.75(Y-T) Planned Investment I=100 Government purchases =100…

Q: What happens to savings when the consumption function lies above the 45° line. (hint: Keynesian…

A: When the Consumption exceeds income, this means that people consume more than their income i.e they…