Refer to Figure 5-1 above. If the economy moves from point A to B on the graph, it is going through a(n) peak trough expansion I boom recession (objective C8)
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- Suppose an economy has a marginal propensity to consume of 0.66 along with $38,039 consumption taking place when disposable income is $44,238. What would disposable income be if you observe a consumption level of $45,239? Round your answer to two digits after the decimal.Consider an economy described by the following:Autonomous consumption ( a ) = 100Autonomous Investment = 100Marginal propensity to consume = 0.75 What is the savings function for this economy?What is the vertical intercept of the consumpation function that represents the portion ofconsumption expenditure not associated with a level of disposable income?a. Consumption interceptb. Disposable income intercept c. Autonomous consumption d. Automatic consumption line
- these bottom two are solved I am just struggling with how to graph the consumption function and the breakeven condition for this problem and to Point out the income and consumption values relevant for these problems: 3. The marginal propensity to consume (MPC) is 0.75, which means that households spend 75% of each additional dollar of income. The starvation-level consumption is 6, which means that households will consume at least 6 dollars, regardless of their income. Therefore, the amount that households will save can be found by subtracting their minimum consumption level from their gross income, multiplying the difference by the MPC, and subtracting the lump-sum tax: Savings = (1 - MPC) * (Gross Income - Starvation-level Consumption) - Lump-sum Tax Savings = (1 - 0.75) * (40 - 6) - 10 Savings = 0.25 * 34 - 10 Savings = 1.5 Therefore, households will save $1.5. 3. a) How should the lump-sum income tax change to allow households to save 3? To allow households to save…As your income increases over time, your marginal propensity to consume (MPC) can remain constant, or it can change. Would you expect your MPC to increase, decrease, or remain the same if your income increases during your career?Which of the following will not tend to shift the consumption schedule upward?Select one:a. A currently small stock of durable goods in the possession of consumers. b. The expectation of a future decline in the consumer price index.c. A currently low level of household debt.d. The expectation of future shortages of essential consumer goods.
- What will be the value of average propensity to consume if income of household is $1350 and the Consumption is $990Suppose you estimate the consumption functionThe government of Australia has embarked on various policies in order to reduce the severity of COVID 19 on the economy. Has COVID 19 caused economic expansion or a recession? Explain your answer using at least two economic effects on the economy of Australia
- An economic theory regarding the effect of an economic variable on another when all other factors stay constant is called _____. laissez faire Keynesian e pluribus unum Ceteris ParibusFind the value of MPC when multiplier is stated as 0.97The marginal propensity to consume for this economy is …………. if income rises from $9000 to $10000 and consumption is rises from $750 to $1500 0.650. 0.750. 0.650 or 0.664, depending on whether income is $10,000 or $11,000. 0.800.