In a given economy where citizens spend 80% of each additional dollar of income, the government increases its purchases by $2400. Calculate the total change in income (Y) that results. Carefully follow all numeric directions. Use a negative number to indicate a decrease in Y and a positive number to indicate an increase.

In a given economy where citizens spend 80% of each additional dollar of income, the government increases its purchases by $2400. Calculate the total change in income (Y) that results. Carefully follow all numeric directions. Use a negative number to indicate a decrease in Y and a positive number to indicate an increase.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

ChapterD: The Expenditure-output Model

Section: Chapter Questions

Problem 23CTQ: Exercise D23 Two counties are in a recession. Country A has an MPC of 0.8 and Country B has an MPC...

See similar textbooks

Similar questions

Find the level of savings when consumption is $610 and the income is $111
Exercise D23 Two counties are in a recession. Country A has an MPC of 0.8 and Country B has an MPC of 0.6. In which country will government spending have the greatest impact?
Exercise D12 What are the components on which the aggregate expenditure function is based?
Exercise D8 What determines the slope of a consumption function?
Calculate the value of income if consumption is $2000 and savings is $1200
Which one of the following is NOT a possible relationship between income and spending Select one: a. Income equals the level of spending b. Spending is higher than income c. None is a relationship d. Income is higher than spending
ZPharma Co., a pharmaceutical company, sells three different products:Zdiet, a Weight Loss Medication, Zataflam, a Non-Steroidal Anti-Inflammatory and Zolymox, an Antibiotic. Due to a new government regulation regarding pricing medications, suppose that the prices of these products have increased as follows: Zdiet (25%), Zataflam, (20%) and Zolymox, (10%). As a result, the monthly quantity sold from each product declined by the following percentages: Zdiet (35%), Zataflam (12%), and Zolymox (5%).Calculate the price elasticity of demand for the three products: Zdiet, Zataflam and Zolymox. Interpret your results to the best of your ability. Analyze the potential effect of the increase in prices on sales revenue of each product. Now, suppose the decline in demand indicated above was caused by a 20% decrease in income level. How would you best describe each product?
Q8. Please draw a change that raises the final incomes of the poorest households, but doesn't raise total spending
The 2008 financial crisis had a dramatic impact on the wealth of households. Since then, has household wealth[1] (that is, the average wealth across households) returned to its pre-2008 levels?
Calculate the value of consumption if APC is 0.31 and income is $4499
When the Consumer Price Index decreases from 105 to 100 a. more money is needed to buy the same amount of goods, so the value of money rises. b. less money is needed to buy the same amount of goods, so the value of money falls. c. more money is needed to buy the same amount of goods, so the value of money falls. d. less money is needed to buy the same amount of goods, so the value of money rises.
COVID 19 pendamic and its effect on the economy