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- Price of advertising in newspapers and magazines are Rs.5 and Rs.10 respectively. The total budget for advertising is Rs.105. For maximizing the sales, find out the best combination of advertisement in newspapers and magazines by using lagrangian multiplier.Q8. Which one of the following is NOT true: Options - We do not need to know the functional form of heteroskedasticity to perform White's test for heteroskedasticity. Lagrange Multiplier test for heteroskedasticity requires us to specify a functional form for heteroskedasticity. Heteroskedasticity makes OLS estimator biased. Jarque-Bera test does not test for heteroskedasticityWhat is constrains optimization, explain and discuss the significance of langrage multiplier.
- If aggretate exppenditure is greater than total income: investment will decrease because such a high level cannot be sustained. planned savings will decrease in line with investment. output will increase to replenish depleted inventories. investment will decrease to run down excessive inventories. there is an error, since the two are same by definitionProve that the multiplier is equal to 1/(1-mpc)Assume there are 2 people Xavier with a Marginal propensity to consume (MPC) of 80% and Francis with a Marginal Propensity to save (MPS) of 10%. Xavier enjoys life and has a minimum consumption of $10,000 without any income, while Francis is more modest, with a minimum consumption of $7,500 without any income. a. Demonstrate and explain the income expenditure model for Xavier and Francis on separate graphs with income ranging from 0 to $100,000 in $20,000 increments. b. Compare the minimum income levels where savings begins for Xavier and Francis. c. How does the difference in MPC affect the economies for each state? d. If the government decides to take all savings above $2,000, is this fair to Xavier? Francis? e. How might this change their behavior? How is this relevant to discussions about wealth inequality? How are individual choices relevant to wealth inequality?
- In an economy where the MPC is 0.7, the proportional tax rate is 0.25 and the marginal propensity to import is 0.2, the multiplier will be:Select one:a.0.675b.1.48c.2.35d.2.1If the ratio of MPC and MPS is 4:1 then the value of investment multiplier would be 4 True / FalseWhat happens to GDDP if the investment icreases by 100 with MPC 0,8 and tax 20%
- If the MPC is 0, then the multiplier is A. 1. B. 0. C. infinite. D. None of the above is correct.If your income increases from $40,000 to $48,000 and your consumption increases from $35,000 to $39,000, your marginal propensity to consume (MPC) isAssuming there is no government or foreign sector, [1 / 1- MPC] represents a. the consumption function.b. the saving function.c. the multiplier.d. break even income