If planned expenditures are below actual production, what will happen to income?  Explain the process by which this happens.

Q: If the income level is 120 and total savings for that level is 40 find the average propensity to…

A:

Q: Do you think that the marginal propensity to consume out of current income differs between tenured…

A: The marginal propensity to consume out of current income differs between tenured professors who have…

Q: In an economy, marginal propensity to consume (MPC) is 0.75 where Keynesian model works. Now, if…

A: Spending multiplier = 1 / (1 - mpc) = 1 / (1 - 0.75) = 1/0.25 = 4 So, when G increases by 1000,…

Q: The marginal propensity to save of a certain country is given by S'(x) = 0.5 + 0.4x. Determine the…

A: Marginal propensity to save is the fraction of change in savings and change in income.

Q: Which of the following would not increase autonomous consumption spending? Select an answer and…

A: Disposable income refers to the income that is received by the consumer after the payment of tax. If…

Q: If autonomous spending increases:

A: Increase and decrease in autonomous spending leads to change in various things.

Q: Suppose the MPC is 0.8. The government wants to decrease Total Spending by $600. How should it…

A: MPC=0.8 Total Spending=$600 Multilplier= Change in Y/Change in G=1/1-MPC 600/Change in G=1/1-MPC

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: The marginal propensity to consume plus the marginal propensity to save equals     A)  zero   B)…

A: Marginal propensity to consume refers to the ratio of change in consumption and change in income.…

Q: Will an economy with a high multiplier be more stable or less stable than an economy with a low…

A: In economical aspects, a multiplier extensively alludes to a monetary factor that, when expanded or…

Q: What is the difference between consumption and autonomous consumption?

A: Consumption refers to the purchase of goods and services by the people in an economy. Consumption…

Q: How to calculate marginal propensity to consume

A: The marginal propensity to Consume is the metric that quantifies the induced consumption of the…

Q: Use the table below to answer the following question.   Income Consumption (Dollars) (Dollars)…

A: According to Keynes, consumption is a function of income. MPC or marginal propensity to consume is…

Q: The multiplier process can occur when a decrease in investment spending...

A: The multiplier process explains the vicious circle formed by the economic transaction.

Q: According to the multiplier concept when there is a change in any one of the components of total…

A: Multiplier is the process by which a change in autonomous expenditure leads to change in income by…

Q: Explain the relationship between consumption and saving in the Keynesian model.

A: The total expenditure within the economy and its consequences on output, employment, and inflation…

Q: Why do economic booms and recessions tend to be transmitted across national borders? Explain your…

A: In a recession, the incomes and economic activity in a nation decline along with the real GDP. On…

Q: From a spending model perspective, explain the causes of a recession

A: Recession refers to the situation where the growth rate of GDP is become negative between the two…

Q: if an inflationary gap exists, what will happen to business inventories?

A: The difference between what gross domestic product (GDP) would be at full employment and the actual…

Q: What is ? 1-)Unemployment 2-)Population 3-)Marginal Propensity To Consume

A: Unemployment, Population and Marginal propensity to consume are all macro economic variable, which…

Q: Describe the phenomenon of the multiplier effect?

A: The multiplier effect is the phenomenon of proportional change in a variable (such as income) due to…

Q: How much more would you spend if you won a $1,000 lottery prize?  Why might your average and…

A: Marginal Propensity to Consume (MPC) refers to the change in consumption due to the change in…

Q: An increase in the marginal propensity to consume will make the spending multiplier ? An increase in…

A: Marginal propensity consume shows the ratio of  change in consumption to change in income  MPC=…

Q: Why is investment spending unstable?

A: The investment is the process of spending the money for making more returns from the fir or process…

Q: the consumption schedule shows

A: The consumption schedule shows the relationship between consumption and level of disposable income.…

Q: Identify factors that would cause consumption spending to increase. What effect would that have on…

A:

Q: If the supply of petroleum were reduced by petroleum firms due to rising inventories, we can expect…

A: Price is determined by interaction of supply and demand curve.

Q: Are the gains achieved or losses incurred by delaying consumption?

A: Delaying consumption is gainful

Q: You Suppose the government increases education spending by $20 billion. If the marginal propensity…

A: Here we calculate the total spending increases by using the given information  , so the calculation…

Q: How do households dissave?  Where do they get the money to finance their extra consumption?  Can…

A: Dissaving refers to the activity of spending more amount than what is earned.

Q: Determine whether each of the following, other factors held constant, would, in the short run, lead…

A: Real GDP is calculated by multiplying current year quantities with base year prices. It is the…

Q: What is the consumption function? What is the marginal propensity to consume? What does an…

A: Understanding consumption in an economy is important to calculate the GDP of an economy, consumption…

Q: In the Savings-Investment model, what is the effect of an increase in government spending on…

A: Saving – investment diagram represents if one parameter of this model changes how investment…

Q: If an inflationary gap exists, what will happen to business inventories?  How will producers…

A: The inflationary gap refers to a situation when the current level of real GDP is higher than the…

Q: What is the aggregate expenditures function?

A: Economics is the study of allocation, distribution and production of resources. It has two branches-…