If mpc = 0.8 and the additional income is P12,000, how much is the additional consumption? How much is the additional savings? show the computations
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If mpc = 0.8 and the additional income is P12,000, how much is the additional consumption? How much is the additional savings? show the computations
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- If Samantha's income is reduced to zero after she loses her job, her consumption will be ________ and her saving will be ________. Group of answer choices greater than zero; less than zero less than zero; less than zero greater than zero; greater than zero less than zero; greater than zeroAssume you have $2,000 autonomous consumption and given $10,000 disposable income did not allow you to save anything. What will be your MPC?Empirical evidence suggest that many consumers tend to spend all of their current disposable income immediately. Is this irrational? Discuss
- Empirical evidence suggests that many consumers tend to spend all of their current disposable income immediately. Is this irrational?Suppose your current income is $90,000 and your future income is $110,000. The interest rate is 10%. a. Suppose your optimal bundle is to live “paycheck by paycheck”, draw the intertemporal budget constraint and optimal bundle in a graph, and mark the optimal bundle and maximum C1, C2.b. What if your MRTP is 1.05, how should you change your consumption? c. What if your MRTP is 1.2, how should you change your consumption?d. If the interest rate decreases to 5%, how should you change your consumption? If the interest rate increase to 15%, how should you change your consumption?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 10 1 10
- As shown in Exhibit 2, savings occurs: Group of answer choices at 0. between 0 and $4 trillion. at $2 trillion. where disposable income is greater than $4 trillion.Suppose that Tyler wants to buy a house and is thinking of using $20,000 that sits in a retirement account for a down payment on this new home. Using the $20,000 as a down payment will reduce Tyler's income when he retires in 30 years. If Tyler can earn an 8%8% annual return on his money if he leaves it in the retirement account, how much will his consumption in retirement be reduced if he uses this money for a down payment now?Using the figure below, graphically prove that the consumer saves less when his future income increases.
- Assume you define your permanent income as the average of your income from this and the past four years. Your earnings record over these five years has been: Yt = 40,000, Yt-1 = 38,000, Yt-2 = 34,000, Yt-3 = 32,000, Yt-4 = 31,000. If your income increases next year to Yt+1 = 46,000, by how much will your consumption change if you always consume 90 percent of your permanent income?Find the value of MPC if the value of the MPS is given as 0.33If Evan's income is reduced to zero after he loses his job, his consumption will be ________ and his saving will be ________. a.greater than zero; less than zero b.greater than zero; greater than zero c.less than zero; greater than zero d.less than zero; less than zero
