In a macro model where the marginal propensity to consume out of disposable income is 0.80, the net tax rate is 0.25, and the marginal propensity to import is 0.11, the simple multiplier will be OA. 3.448 O B. 2.041 OC. 0.490 O D. 1.961 O E. 1.408
Q: The givens are in the picture, here is the question: D. Graph y,sy, and breakeven investment…
A: The Solow Model with the help of the supply and the demand for goods can determine how much output…
Q: Treasury bills are traded in a Select one: O a. money b. stock O c. capital d government market.
A: A Treasury bill, sometimes known as a "T-bill," is a type of short-term debt instrument that the US…
Q: A small town has two bakeries, Acme and Fat Apple. Acme's marginal cost to make a loaf of bread is…
A: Acme's marginal cost to make a loaf of bread is $1 and Fat Apple's marginal cost is $2Acme's demand…
Q: The diagram to the right is a basic supply and demand graph. Economists use it to analyze…
A: A price floor is imposed in a market above the equilibrium price level, it a price regulation by the…
Q: Consider the following observations in an AD-AS graph. At point 1, the economy is at potential RGDP…
A: The Phillips curve and the AD-AS model are important concepts in macroeconomics. The Phillips curve…
Q: 1) In the case of a perfectly price-discriminating monopoly, there is: A. zero consumer…
A: Monopoly refers to a market situation at which there is only one firm selling a product in the…
Q: Ms Smith likes to drink wine; in particular, a french bordeaux (f) at $40 per bottle and a…
A: The utility is maximized where the indifference curve tangents the budget line. or slope of the…
Q: What is the of the measures of the monetary aggregates is composed of the most liquid assets
A: Monetary aggregates refer to various categories of money supply in an economy, typically classified…
Q: isted below, determine what happens to the equilibrium price and equilibrium quantity for each…
A: Demand curve depicts the inverse relationship between price and quantity demanded of a product,…
Q: ) A consumer with income I=120 facing prices pX = 4 and pY = 8 for two goods X and Y (for each good…
A: The marginal rate of substitution (MRS) is a concept in economics that measures the rate at which a…
Q: Farmer Brown faces a 25% chance of there being a year with prolonged drought, with zero yields and…
A: Utility Function: A concept in economics that represents an individual's preferences or satisfaction…
Q: Explain the role of advertising in monopolistic competition. Describe how advertising by all firms…
A: Industrial economics is the study and appraisal of business financial issues utilizing abstract…
Q: analyze graphically the issues of climate change and national security from the perspective of an…
A: An oil embargo is a political and economic action taken by one country or a group of countries to…
Q: 3. The revenue function of a certain item is R(x) = 400x - 2x. The marginal cost of the item is…
A: The cost function refers to the mathematical presentation of the costs of the firm:
Q: 6. MRS and utility maximization Suppose your classmate Bob loves to eat dessert—so much so that he…
A: Utility is the satisfying power of a commodity. Consumers' main goal is to maximize the given…
Q: 4. Supply and demand for loanable funds The following graph shows the market for loanable funds in a…
A: Demand curve is the downward sloping curve. Supply curve is the upward sloping curve. Equilibrium is…
Q: What is the price of a perpetuity that has a coupon payment of $50 per year and a YTM of 2.5%?…
A: A financial product or investment known as a perpetuity is one that provides a constant quantity of…
Q: True or False? According to the Basic Trade Model, if we were to think of the WTO as a big…
A: The core of trade ideas is international collaboration. Specialization is encouraged by the notion…
Q: f marginal cost is decreasing, what is happening to an average variable cost (decreasing,…
A: the marginal cost refers to the change in the total cost that arises when the quantity produced is…
Q: price elasticity of supply between points A and B
A: The following formula must be used to determine the price elasticity of supply between places A and…
Q: Refer to the figure below. The slope of the budget line in the graph: Q earrings 5 4 3 2 1 2 Q…
A: Slope of the budget line shows the relative price of two goods. It also shows the opportunity cost…
Q: The market supply curve for this industry is OA. Q = P-200 for P > 200 and Q = 0 for P ≤200. B. Q…
A: Perfectly competitive market refers to the market where large number of buyers and sellers exist in…
Q: Why Canada's Industry Leaders Need to Embrace the Technology Mindset We are at a tipping point where…
A: The new growth theory explains that innovation is very important for the growth of an economy and…
Q: What impact would child immuniation intervention have on demand and consumer behavior in the long…
A: The use of vaccines in preventing childhood from infectious diseases, known as child immunization…
Q: QUESTION 8 A nudge is any aspect of the choice architecture that alters people's behavior in a…
A: Nudging, a concept popularized by behavioral economics, involves subtle changes in the choice…
Q: What can be worth more or less in international markets depending on how trustworthy the government…
A: An international market defines the global arena in which goods, services, currencies, and assets…
Q: In response to customer complaints about rising prices of food items, a supermarket responds by…
A: A supermarket offers the following deal in response to complaints from customers about rising food…
Q: A city government is considering two types of town-dump sanitary systems. Design A requires an…
A: Often referred to as CBR, the benefit-cost ratio is an indicator used in project assessment as well…
Q: Help me understand this experiemental economics question: To study if there is gender…
A: A full factorial design can be used to create an experiment to explore gender discrimination in the…
Q: There are two economies. At the beginning of Year 1, their real GDPs are equal. Economy A grows at a…
A: Standard national income estimates are commonly employed in assessments of economic growth, living…
Q: 2. Equilibrium and disequilibrium in the money market The following diagram represents the money…
A: Money is a commodity received by general consent as a medium of economic exchange. It is the means…
Q: Which of the variables in the Equation of Exchange (MVPQ) is the one that matters because it is…
A: Equation of Exchange:The equation of exchange represents the relationship between the money supply…
Q: True or False: The licensing and regulation of financial advisers is one way by which the…
A: Licensing and regulation of financial advisers are crucial globally. Advisers must meet educational…
Q: 3. What is the future value in year 10 of the series described in Problem 2?
A: Present value is the value of investment in today's dollar. Future value is the value of investment…
Q: 280 180 140 I 10 II 45 70 W BER Demand
A: A concept in economics called price elasticity of demand (PED), usually referred to as price…
Q: 7. Using the income elasticity of demand to characterize goods Data collected from the economy of…
A: Income elasticity of demand measures how sensitive the quantity demanded of a good is to a change in…
Q: Note: Dashed drop lines will automatically extend to both axes. 32 28 24 20 16 12 4 0 32 28 24 20 16…
A: Comparative advantage refers to the ability to produce goods and services at a lower opportunity…
Q: When estimating a cubic short-run production function Q =AL³ + BL² using linear regression analysis,…
A: A cubic short-run production function is a mathematical representation of the relationship between…
Q: Price (per gallon) $5 4 3 2.50 2 1.50 1 0 D 100 200 300 400 500 600 Quantity of gasoline (per month)…
A: The demand curve is the downward-sloping curve. The supply curve is the upward-sloping curve. The…
Q: Samantha is a disgruntled business owner of Lactid country. She thinks that the process of national…
A: A government utilizes national accounting, often referred to as national income accounting, as a…
Q: How does the figure arrived at in adding up the demand side components of GDP relate to the number…
A: Gross Domestic Product (GDP) is the total monetary value of all finished goods and services produced…
Q: 1. the general agreement on tariffs and trade is an international agreement a. to encourage world…
A: ***Since the student has posted a question with multiple MCQs, the expert is required to solve only…
Q: Consider a tropical island economy with only two sectors: souvenir manufacturing and hospitality…
A: The link between the amount of labor supplied and their wages, while maintaining other variables…
Q: When Apple introduced its first portable media player, the iPod, its constant marginal cost of…
A: Inverse Demand function : p = 600 - 25QMarginal cost = $200Fixed Cost = 736 million
Q: George Kyparisis makes bowling balls in his Miami plant. With recent increases in his costs, he has…
A: Productivity changes refer to the changes in the inputs while producing the same level of output.…
Q: isnt building of new public hospital considered investment
A: The entire monetary worth of all commodities and services generated inside a nation's boundaries…
Q: Which of the following most directly decreases profits if nothing else changes? O Changing your…
A: In economics, profit is the financial benefit or gain obtained when the revenue generated from the…
Q: (Figure: Price Elasticity of Demand I) What is the price elasticity of demand at point A Price| $12…
A: Price elasticity of demand shows the responsiveness of a percentage change in price to a percentage…
Q: The price elasticity of toy cars that you sell is-3.00 [negative 3]: you currently charge a price of…
A: Price elasticity of demand refers to the percentage change in the quantity demanded of a goods or…
Q: Aerotron Electronics is considering purchasing a water filtration system to assist in circuit board…
A: Present worth (PW), also known as present value (PV), is a financial concept used to assess the…
Step by step
Solved in 3 steps
- An increase of R5 billion in income in a macroeconomy leads to an increase in R3billion in consumption spending. From this information, we can determine that themarginal propensity to save in this economy is:choose the correct answer(a) 0.6; (b) 0.5;(c) 0.3; (d) 0.4Suppose that the recent economic outlook in the country of Mountainia has been the opposite. Businesses have postponed planned investments and have begun to accumulate cash. If businesses in Mountainia postpone $12 billion of their planned investments, what would be the maximum expected change in GDP if its marginal propensity to save (MPS) is 0.05? $ billionHere is a little easy one. The question is based on Macro. The consumption function is given by C=AYB where B=0.5 and A=0.3. The marginal propensity to save (MPS) is: a) Equal to 0.5 b) increasing in income, Y c) equal to 0.3 d) equal to 0.7 The correct answer is b, I think as there is no direct way to calculate MPS(Righ?). Please work me through the logic of it. Please show clearly that MPS is an increasing function in Y. Thank you.
- 18. According to the income and consumption schedules shown above, the marginal propensity to consume is(A) 1.33(B) 0.90(C) 0.80(D) 0.75(E) decreasing as real disposable income How come MPC equals 0.75?The following questions refer to this table: a.At each level of output, calculate saving. At each level of out-put, calculate unplanned investment (inventory change).What is likely to happen to aggregate output if the economyproduces at each of the levels indicated? What is the equilib-rium level of output?b.Over each range of income (2,000 to 2,500, 2,500 to 3,000, andso on), calculate the marginal propensity to consume. Calculatethe marginal propensity to save. What is the multiplier?c.By assuming there is no change in the level of the MPC andthe MPS and planned investment jumps by 200 and is sus-tained at that higher level, recompute the table. What is thenew equilibrium level of Y? Is this consistent with what youcompute using the multiplier?Suppose that the marginal propensity to consume is dC/dy= 0.4 + (1 / sq. root of 3y + 10)(in billions of dollars) and that consumption is $9 billion when disposable income is $0. Find the nationalconsumption function C. Round numbers in your answer to two decimal places when appropriate.
- If the MPS rises, then the MPC will: a. Fall b. Rise c. Stay the same In what direction will each of the following occurrences shift the consumption and saving schedules, other things equal? a. A large decrease in real estate values, including private homes. b. A sharp, sustained increase in stock prices. c. A 5-year increase in the minimum age for collecting Social Security benefits. d. An economywide expectation that a recession is over and that a robust expansion will occur. e. A substantial increase in household borrowing to finance auto purchases. Irving owns a chain of movie theaters. He is considering whether he should build a new theather downtown. The expected rate of return is 15 percent per year. He can borrow money at a 12 percent interest rate to finance the project. Should Irving proceed with this project? Which of the following scenarios will shift the investment demand curve right? (Select one or more answers) a. Business taxes increase b. The expected return…We again assume asimple closed economy with GDP of 100 and:c0(autonomous consumption) = 20c1 (marginal propensity to consume) = 0.6I (investment) = 20.a) Now assume that c0falls by 5 (i.e. 5% of GDP), i.e. for any given level of output,consumption will fall by 5. Show the implied fall in the AD function in yourdiagram and show that output will fall by more than 5.b) Show that the multiplier is equal to 2.5, and hence that, in the new equilibrium,output will have fallen by 12.5 (i.e. by 12.5%)c) How big would the impact be if, say, c1 = 0.4 or c1 = 0.8? Explain the difference.1. Show that equilibruim level of income is at a point where consumption plus investment schedules intersect the 45 degree line. 2. Suppose the level of autonomous investment in an economy is K200,000 and the consumption function is given below as c = 80+0.8Y, what will be the equilibrium level of income. 4.if MPcC is 0.8, what will be the increase in the level of income if investment is increased to K400,000. 5. What increase in investment is needed to raise the income by K4000, if MPC is 0.75? How much will be the increase in consumption and saving due to this increase in income. 3. Given the consumption level C= 50 + 75Y, if we assume autonomous investment is K200,000 at what level of income will savings become equal to investment?
- 9. If the MPC is greater than zero but less than one, then we can be sure that when disposable income rises by P1 consumption will: a. not be affected b. will rise by more than P1 c. will rise by less than P1 d. will rise by exactly P1.If aggregate expenditures increase by $12 billion and equilibrium GDP consequently increases by $48 billion, then the marginal propensity to save in the economy must be: MPC= change in consumption/ change in income so MPC=12/48 or .25 So the MPS is .75 Is this correct?Suppose that the marginal propensity to save is dS dy = 0.21 (in billions of dollars) and that consumption is $9.8 billion when disposable income is $0. Find the national consumption function.