Q: An initial increase in investment spending will generate: Less of an increase in income…
A: The amount of desired investment would rise as a result of an increase in investment, which would…
Q: Two countries are in a recession. Country A has an MPC of 0.8 and Country B has an MPC of 0.6. In…
A: Country A MPC = 0.8G Government Spending Multiplier=11-MPCGovernment Spending…
Q: Find the value of the multiplier when the MPS equals to 0.70
A: Formula: Multiplier = 1/(1-MPC) MPC = 1- MPS
Q: A reduction in U.S net exports would shift U.S. aggregate demand A. rightward. In an attempt to…
A: The correct answer is option c
Q: When households in the United States have more income to spend, they increase their consumption…
A: Answer: True, Explanation: Net export refers to the difference between export and import (Net…
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: Assume net exports are $-200, consumption is $5,000, government purchases are $1,500, and GDP,…
A: Answer: The formula to calculate GDP by expenditure approach is given below: GDP = Consumption +…
Q: If a rise in national income of £100m causes consumption of domestic goods and services to rise by…
A: multiplier level depends on the consumption level , higher the consumption more the multiplier so…
Q: Explain the effect of foreign repercussions on the value of the spending multiplier.
A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…
Q: If the multiplier in an economy is 3, a $40 billion increase in net exports will Multiple Cholce…
A: GDP refers to the term of gross domestic product. It is the market value of final goods and services…
Q: hich of the following will most likely cause movement along the consumption function? a. A change…
A: Definition of Consumption Function : A consumption function shows what is the consumption at…
Q: 42billion, and spending on imports was $35$35 billion. The price level increases, resulting in a…
A: Given : Consumption spending = $150 billion Investment Spending=$40 billion Government spending=$50…
Q: ns) Expenditure (billions) 65.5 65.0 60 61.8 64.5 -0.5 62.1 64.0 61 62.4 63.5 -1.5 62.7 63.0 62 63.0…
A: an option is incorrect because, with GDP higher than Aggregate expenditure at 65, firms tend to have…
Q: In year 1, the level of production in an economy is recorded as R1000m and in year 2 it increases to…
A: Marginal propensity to consume (MPC) measures the change in consumption spending due to changes in…
Q: Find value of the multiplier if MPC = 0.5 MPS = 0.35
A: Marginal propensity to consume (MPC) is the ratio of the additional consumption to the additional…
Q: An increase in net exports will shift the AD curve to the Multiple Choice right by a multiple of the…
A: A change in a component of AD shifts the AD by multiple of the change in component. AD components…
Q: Why are changes in inventories included as part of investment spending? Suppose inventories declined…
A: GDP is a macroeconomic measure that is used to determine the total aggregate production in a…
Q: 2000 0.90 0.10 2500 0.88 0.12 5. Based off your findings. What is the Multiplier at a disposable…
A: we need to find MPC for calculating the Multiplier and for MPC calculation we need t calculate the…
Q: If economists forecast a decrease in aggregate expenditure, which of the following is likely to…
A: Aggregate expenditure is the overall spending generated by forces in the market for a given period.
Q: Using the income-expenditure model, what is the expected effect (increase, decrease, or no effect)…
A: Income-expenditure method: It refers to the model under which the fluctuations and spending are…
Q: Why does a downshift of the consumption schedule typically involve an equal upshift of the saving…
A: Consumption schedule shows the amount of income spent on consumption. Saving schedule shows the…
Q: According to the shares of spending model, what would happen to interest rates, consumption,…
A: What happens when Net export increases According to shares of spending model, INTEREST RATE The…
Q: In Russia, the value of multiplier is 7 Calculate the value of MPS
A: The information being given is:- Multiplier = 7 Marginal propensity to save = ?
Q: Calculate Investment multiplier when MPS is 0.22
A: # We know that the reciprocal of MPS gives the investment multiplier. Investment multiplier = 1/MPS…
Q: The accompanying table shows gross domestic product (GDP), disposable income (YD), consumer spending…
A: Planned aggregate expenditure = Consumption spending + Planned investment spending AEplanned = C +…
Q: Q.1.13 An increase in the marginal propensity to consume: (1) Shift the aggregate spending function…
A: Since you have posted multiple questions as per the guidelines we can solve only one at a time.
Q: A. Place each of the following transactions in one of the four components of expenditure:…
A: The economies around the world tend to focus on their economic growth, and development through…
Q: the consumption schedule shows
A: The consumption schedule shows the relationship between consumption and level of disposable income.…
Q: The tax cuts of 2008 and 2009 reduced the disposable income of U.S. consumers. True or False
A: The tax is a unilateral payment made by the people towards the government for various purposes such…
Q: Insert the missing word or phrase: When planned aggregate spending does NOT equal current GDP,…
A: Aggregate Spending is the aggregate expenditure which is sum of consumption and investment.
Q: Scenario 34-2. The following facts apply to a small, imaginary economy. • Consumption spending is…
A: Crowding out is a situation that occurs when an increased interest rate leads to a decrease in…
Q: Calculate the value of Investment multiplier when the value of MPS is 0.61
A: Investment multiplier shows the number of times an increase in investment spending increases the…
Q: The average propensity to save is 2 times the average propensity to consume Calculate (1) APC (2)…
A: The data presented in the question is:- APS = 2APC We have to calculate APS and APC
Q: In a certain economy, when income is $200, consumer spending is $145. The value of the multiplier…
A: The marginal propensity to consume is the proportion of the disposable income that a person wants to…
Q: Explain in detail what effect a reduction in government spending will have on: (1) the LM curve; and…
A: The IS curve is a downward sloping curve which reflects a negative relationship between the interest…
Q: Suppose that disposable income, consumption, and saving in some country are $800 billion, $700…
A: Economic measures use mathematical tools to determine the value of economic variables such that:…
Q: Suppose that exports increase by $300 billion, given an MPC of .75. Calculate the change in GDP.…
A: Gross domestic product (GDP) is the standard measure of the value added created through the…
Q: If a change in the real interest rate has no effect onplanned investment spending or net exports,…
A: IS curve shows the different combinations of interest rate(r) and output(Y) which keeps the…
Q: TRUE/FALSE If aggregate expenditures exceed aggregate income then inventories will rise and firms…
A: The statement, given in the question "If aggregate expenditures exceed aggregate income then…
Q: The multiplier is Multiple Choice 1/(1 MPC. 1/MPS. 1/(1- MPS). 1/MPC.
A: The multiplier is defined as the change in income of the household to the permanent change in the…
Q: In Eiffel Land, the autonomous consumption is 2000, the mpc is 0.6, net taxes are 200, planned…
A: The planned aggregate expenditure is the combined expenditure that economic agents such as consumers…
Q: When consumers’ expect that future prices will increase, it is expected that current…
A: Meaning of Consumer Welfare: The term consumer welfare refers to the situation under which an…
Q: As a result of increase in investment by $125, national income increases by $500. Calculate marginal…
A: Given that Change in investment = $125 CHange in national income =$500 We have to calculate…
if the multplier in an economy is 2, a $10 billion increase in net exports will
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- If the multiplier in an economy is 5, a $20 billion increase in net exports will. make sure the answer is accurate.Group of answer choices decrease GDP by $100 billion. increase GDP by $20 billion. increase GDP by $100 billion. reduce GDP by $4 billion.Calculate the marginal propensity to save when total saving increases from $200 billion to $300 billion as a result of increase in income from $900 to dollar $1200 billion.Assume a simple model with no government or foreign sector. If an increase in autonomous investment of 100 leads to an increase in consumption of 300, the size of the expenditure multiplier is
- TRUE/FALSE If aggregate expenditures exceed aggregate income then inventories will rise and firms will eventually lay off workers.the consumption schedule showsGiven the marginal propensity to consume = .75 and marginal propensity to import = .15, then we should expect (ceteris paribus) that an autonomous reduction of net exports = - $100 will Group of answer choices reduce GDP by $400. reduce GDP by $50. not affect the level of GDP. reduce GDP by $100. reduce GDP by $250.
- Use the diagram to answer the question which one of the following will increase the size of the multiplier? A. an increase in the level of net exports B. An increase in the marginal propensity to consume C. an increase in the marginal propensity to save D. a reduction in the level of government spendingThe multiplier process can occur when a decrease in investment spending...Will an economy with a high multiplier be more stable or less stable than an economy with a low multiplier in response to changes in the economy or in government policy?