The difference between planned and unplanned spending is Select one: O a. always negative O b. unplanned changes in inventories O c inventories O d. always positive
Q: What is your prediction for the economy when you observe that inventories are taking an unplanned…
A: In an economy, unplanned Inventory refers to the amount of goods and services that are not planned…
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A: Note: As you have asked multiple questions, we will solve the first question for you. If you want…
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Q: Quèstion 27 $60 $40 $20 $50 + 100 150 200 Disposable Income(Y) -20 Refer to the diagram. The average…
A: The graph shows savings curve that shows the relationship between disposable income and savings.
Q: QUESTION 21 Refer to the information provided in Figure 8.9 below to answer the questions that…
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A: Durable goods are those consumer goods which do not wear out quickly and last a long time.…
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A: Consumption schedule is a table that shows the relationship between Y(Income) and Consumption…
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A: In an economy, inventory refers to the amount of output produced in a specific year and stocked at a…
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A: Ans. is option (e) reduced wealth from falling stock prices.
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A: The aggregate expenditure refers to the total expenditure in an economy. When the economy is in…
Q: Aggregate planned expenditure decreases if O a. investment increases. O b. real GDP decreases. O c.…
A: Aggregate planned expenditure is computed as:
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Q: Refer to problem 2. The equilibrium level of real GDP is * O $2,500 O $2,400 O $2,300 O $2,200
A: The real GDP is said to be at equilibrium when the total amount of output produced in an economy is…
Q: Assume consumption is represented by the following: C = $400 + 0.5Y. Also assume that planned…
A: Given information, Consumption: $400 + 0.5Y Investment: $100 To find: equilibrium level of income
Q: QUESTION 4 If an increase of $5 billion in investment is associated with an increase of $50 billion…
A: Multiplier: It is defined as the number of times by which the income increases due to an increase in…
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Q: QUESTION 1 Below is the data for an economy in the year 2016. Gross Domestic Product = $25,000…
A: Aggregate expenditure is the sum of consumption, investment, government spending and net exports.
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Q: Given the data shown in the table below, if planned investment increased by $100, the new…
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A: Gross domestic product(GDP) measures the money value of all final goods and services produced in an…
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A: GDP is considered an important factor to evaluate the stability, growth, and performance of an…
Q: 63. Fatima's disposable income increases by $1000, and she spends $600 of it. Fatima's a. MPS is 0.6…
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A: An expenditure approach is an approach that sums all the spending activities of the economy. These…
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A: The higher the worth level, the lower the combination expenditures curve and therefore the lower the…
Q: When the general price level falls Select one: a. investment falls as a result of the real wealth…
A: The real wealth effect explains that if the price level decreases, then the purchasing power of the…
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A: When the federal government spends more money than it receives in taxes in a given year, it runs a…
Q: What is equilibrium expenditure? How is equilibrium expenditure determined? Equilibrium expenditure…
A: We’ll answer the first question since the exact one wasn’t specified (numbering of questions is…
Q: Which of the following will shift the consumption function upward? O a. An increase in disposable…
A: As the income of consumer increases, they can spend more money on consuming the goods and services.…
Q: Quèstion 8 In an open mixed economy, the inflationary expenditure gap may be described as the O A.…
A: Inflationary expenditure gap occurs when the actual equilibrium GDP (i.e., intersection point of AD…
Q: Statement A: As disposable income goes up, the APC falls but APS increases. Statement B: As…
A: Average propensity to consume(APC) indicates the part of income that is kept for consumption…
Q: Which of the following is most likely to cause a rightward shift of the investment demand curve? O…
A: A rightward shift of the investment demand curve implies an increase in the demand for investment. A…
Q: assify each of the following items as a final good or an intermediate good, and identify whether it…
A: Intermediate goods : These are those goods which are not ready for final consumption . These goods…
Q: Ceteris paribus, which of the scenarios below will unambiguously lead to an increase in real GDP? O…
A: GDP: It is the total of all values added to the economy.
Q: 50. As disposable income increases, O a. consumption and saving both decrease O b. consumption…
A: 50) Disposable income is the sum of consumption and savings.
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A: In economics, the full employment level or the potential GDP level is achieved when all the…
Q: A $1.5 trillion increase in investment (a component of autonomous expenditure) leads equilibrium…
A: An increase in autonomous expenditure by $1.5 trillion leads to an increase in equilibrium…
Q: If the multiplier is 5 and investment increases by $3 billion, equilibrium real GDP will increase…
A: We are given, Multiplier = 5 Increase in investment = $3 billion To find, increase in equilibrium…
Q: Many economists argue that real GDP is Select one: O a. not a good measure of economic well-being…
A: Many economists do not consider real GDP as a good measure of standard of living or wellbeing as GDP…
Q: 12 63. Fatima's disposable income increases by $1000, and she spends $600 of it. Fatima's a. MPS is…
A: Formula for MPC=change in consumption/change in income =600/1000=0.6 MPC+MPS=1 Therefore MPS=1-MPC…
Q: Which of the following is an injection in the circular flow of income? O Investment O Taxes O…
A: The injections are economic factors (or variables) that help in increasing the output level in an…
Q: Which of the following would NOT lead to an increase in equilibrium Y*? Select one: O a. A downwards…
A: Y* is the sum of consumption spending, investment spending, government spending, and net exports.
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- Assume consumption is represented by the following: C = $400 + 0.5Y. Also assume that planned investment (/) equals $100. the level of Income that occurs at the equilibrium is Select one: O a. $100 O b. $150 O c. $500 O d. $1000In a closed economy with no government, aggregate expenditure is Select one: O a. None of the options O b. Net Tax plus Consumption O c. consumption plus the MPC O d. saving plus investment.Imagine there is a consumption smoother (also known as a PIH consumer) who expectsto live for another 40 years and to work for another 30 years. They just learned thatthey will receive a permanent pay increase from their job of $800. How much extra dothey consume this year? What is their marginal propensity to consume?
- ADVANCED ANALYSIS Suppose that the linear equation for consumption in a hypothetical economy is C = 60 + 0.75Y. Also suppose that income (Y) is $600. Determine the following values: Instructions: For parts a, b, d, and f, round your answers to 2 decimal places if necessary. For parts c and e, enter your answers as a whole number. a. MPC = b. MPS = c. Level of consumption = $ d. APC = e. Level of saving = $ f. APS =For an economy the following functions have been given:C = 100 + 0.8YS = -100 + 0.2YI = 120 – 5rMs = 120Md = 0.2Y – 5rCalculate the following:5.1.1. IS equation 5.1.2. LM equation 5.1.3. Equilibrium level of income 5.1.4. Equilibrium level of interest rate. 5.1.5 Calculate National saving. 5.1.6 Calculate money demand 5.1.7 Find consumption(a) Explain the difference between induced consumption expenditure and autonomous consumption expenditure. Why is not all consumption expenditure induced expenditure? （b） How is it possible for households to have a negative savings rate and what has caused this negative household savings rate? Is this negative household savings rate sustainable in the long run?
- If unplanned inventory investment is positive, then Select one: O a. planned aggregate expenditure must be greater than aggregate output O b. None of the options c. planned aggregate expenditure must equal aggregate output O d. planned aggregate expenditure must be less than aggregate outputIf you practice consumption smoothing, O you always spend less than you earn. there will be times in your life when it makes sense to borrow. O you make sure your current consumption matches your current income. O you do not save for the future.Question 1) a) In panel (a) the curve shifts upward, what could cause this? O Increase in G (govermment spending)O Decrease in HH wealth due to a decrease in housing pricesO An increase in the overall price levelo Areduction in govemment spending (G) b) Using Figure 2, if this economy is currently at Y1 and consumer wealth increases, then___O AD1 will shift to the left, reflecting a decrease in the real GDP at every price level.O AD1 willshift to the right. reflecting an increase in the real GDP at every price level.O an upward movement along the AD1 wiltake place., reflecting an increase in the price level.O a downward movement along the AD1 will take place, reflecting a decrease in the price level.
- Suppose that consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment spending initially rises by $20 billion for every 1 percentage point fall in the real interest rate. Also assume that the economy’s multiplier is 4. b. In what direction and by how much will it eventually shift?1. What would happen to multiplier if investment were to be positively related to income? 2. is it possible for total saving to fall when people beome more thirfty? 3. What is meant by multiplier?Why shoul the value of multiplier rise when people spend more on consumption?Assume that Abdullah has RO 44 to spend on Energy drinks and Protein Bars each month and that both goods must be purchased whole (no fractional units). Energy drinks cost RO 8 and Protein Bars cost RO 3 each. Abdullah’s preferences for Energy drinks and Protein Bars are summarized by the following information: Energy drinks Protein Bars No. per Month TU MU MU/Px No. per Month TU MU MU/Py 1 42 1 18 2 78 2 33 3 108 3 45 4 132 4 54 5 150 5 60 6 162 6 63 7 168 7 66 Fill in the figures for marginal utility and marginal utility per dollar both Energy drinks and Protein Bars. Are these preferences consistent with the law of diminishing marginal utility? Explain briefly. Given the budget of RO 22, what quantity of Protein Bars and what quantity of Energy drinks will maximize Joe’s…
