Q: Consider an AS AD diagram. What would happen in the model if Stock values decreased? Group of…
A: AD-AS model is used to determine equilibrium real GDP and price level.
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A: we can calcualte APS by divinding total savings by income level the proportion of an invome which…
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A: Unplanned inventory: total planned inventory minus the inventory you need from the total planned…
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A: Unplanned inventories: - Unplanned inventory is the increase in the inventory investment over the…
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A: An intermediate good, or a thing that is used in the production of additional commodities (the end…
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A: According to the above mentioned question, we have:- APS = 0.39 Income = $650 We have to find saving…
Q: If MPC=0.8 what will be the value of investment multiplier (A) 4 (B) 5 (C) 3
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A:
Q: Disposable income - 200, 225, 250, 275, 300Consumption - 205, 225, 245, 265, 285 Refer to the above…
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A: Animal spirits is a term used by Keynes to describe human behaviour. It is described as a…
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A: Y is given as $200 Thus, Yd will be: Yd=Y-TYd=200-0Yd=200 (Since taxes is 0) Now, consumption and…
Q: True or False: If consumption expenditure in a medium sized economy is $1.5 (trillion) while…
A: Consumption (C) = $1.5 Disposable income (Yd) = $2.0 Consumption (C) = C0 + C1Yd Assuming C0 is…
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A:
Q: Calculate the marginal propensity to save when total saving increases from $200 billion to $300…
A:
Q: Disposable Income Consumption C Yd $2,000 $2,070 2,100 2,145 2,200 2,220 2,300 2,295 2,400 2,370 4.…
A: Answer; Option 3 is correct
Q: If the marginal propensity to save is 0.2 in an economy, a $20 billion rise in investment spending…
A: It is given that MPS=0.1 and change in investment is $20
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A: ANS Less than real GDP and firms decrease production.
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A: It is given that MPC=0.7
Q: Calculate average propensity to save if income level is $2300 and savings is $1200
A: According to the above mentioned question, the values given are:- Savings = $1200 Income expenditure…
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A: Answer to the question is as follows:
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A: Marginal propensity to consume calculates the change in consumption expenditure when disposable…
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A: Answer to the question is as follows :
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A: Consumption is defined as spending for the acquisition of utility. Investing, on the other hand, is…
Q: Choose the correct answer: . If consumption is $25,000 when income is $26,000, and consumption…
A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…
Q: At equilibrium level, the Ex ante savings and Ex ante investment are equal True/False
A: The planned investment and planned savings are known as ex ante investment and ex ante savings…
Q: 3 billion when disposable
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A: (Q) If the marginal propensity to save is 0.2, then a $10,000 decrease in disposable income will-…
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A: Marginal Propensity to Consume (MPC) - If the income of a consumer increases by a dollar, then how…
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A: Marginal propensity to save: Minimal affinity to spare is the extent of an expansion in pay that…
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A: The 45° line is the GDP or the total output line. Savings is the portion of income that is not…
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A: Given: There is no government sector and no foreign sector. Value of multiplier = 5 To Find : MPC
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A: Macroeconomics analyzes the economy as a whole. It studies aggregate economic concepts such as…
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A:
Q: An increase of R5 billion in income in a macroeconomy leads to an increase in R3 billion in…
A: Marginal propensity to save tells us how saving changes when income increases MPS = 1 - MPC
Q: If the multiplier is 10,
A: For finding multiplier we use the formula Multiplier=(1/1-mpc)
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A: The disposable income = Yd = $900 Average propensity to consume (AVC) = 0.6 APC = Consumption /…
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A: Given information Two period life cycle model Need to use intertemporal budget constraint When no…
Q: Assume the following consumption schedule: C = 20 + 0.9Y, where C is consumption and Y is disposable…
A: Disposable income(Y) refers to the income(Y) left after paying personal taxes(T). The consumer…
State whether it is true or false
Unplanned inventories accumulate when the planned investment is less than planned saving in the economy
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- If the value of marginal propensity to save is 0.2 determine the exact value of investment multiplier.True/False # There is an inverse relationship between the value of marginal propensity to save and investment multiplier.The marginal propensity to consume out of permanent income equals 0.9 and the marginal propensity to consume out of transitory income equals 0.1. Suppose that there is an emergency increase in government spending of $200 billion to repair infrastructure. The spending takes place within a year. The spending increase is financed by a one-time increase in taxes. Prior to the increase in government spending, permanent income equals $9,600 billion and transitory income equals zero. (a) Compute the amounts of consumption expenditures and private saving prior to the tax increase. (b) Compute the amount of changes in consumption expenditures and private saving, given that the tax increase lasts for only one year. (c) Compute the initial change in aggregate demand that results from this combination of increases in government spending and taxes.
- Suppose that when disposable income decreases by $2,000, consumption spending increases by $1500. Given this information, we know that the marginal propensity to consume (MPC) is: OPTIONS: 1/.25 = 4. $1,000/$750 = 1.33. 75. 25.If consumers save 21 cents out of every dollar received, the Multiple Choice marginal propensity to save is 0.21. multiplier is 0.21. marginal propensity to consume is 0.21. marginal propensity to save is 0.79.The Marginal Propensity to Save (MPS) is 0.75 and the Marginal Propensity to Consumer (MPC) is 0.25. The Multiplier effect will be Select one: 4 times 3 times 0.3 time 1.33 times 1 time
- TRUE OR FALSE The higher the responsiveness of income to interest rates the higher the expenditure multiplierIf 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: Select one: a. 0.75 b. 0.25 c. 0.8 d. 0.2If the marginal propensity to save is 0.2 in an economy, a $20 billion rise in investment spending will increase consumption by Multiple Choice 80. 100. 20. 120.
- True or False: If consumption expenditure in a medium sized economy is $1.5 (trillion) while disposable income is $2.0 (trillion), the marginal propensity to save from disposable income must be equal to 25%.Choose the correct answer: . If consumption is $25,000 when income is $26,000, and consumption increases to $25,900 when income increases to $28,000, the marginal propensity to consume is: 0,59. (B) 0.65. (C) 0.55. (D) 0.45. 2) Suppose consumption is $10,000 when income is $9,000 and the marginal propensity to save equals 0.1. When income increases to $9,500, consumption will be: $8,500. (B) $10,450. (C) $10,500. (D) $10,050.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.