Which of the following relations is not correct? O A. MPC + MPS = 1. O B. APS +APC = 1. OC. MPS = MPC + 1. O D. 1- MPC = MPS.

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: If government spending rises by $100, mps = 0.2, then the GDP multiplier is %3D O 5 O 4 O 1

A: Here, given information is: Change in government spending: $100 Marginal propensity to save (MPS):…

Q: If the simple spending multiplier is 8, the marginal propensity to consume is O a. 8 1/4 wered O c.…

A: The spending multiplier represents the change in the real gross domestic product or aggregate…

Q: The aggregate demand curve slopes: O A. upward, unlike an ordinary demand curve. O B. downward in…

A: Aggregate Demand is the total value of goods and services produced in an economy over the given time…

Q: The difference between planned and unplanned spending is Select one: O a. always negative O b.…

A: Spending: It is the use of money for a specific purpose by the government or organization.

Q: If investment increases by $100 and, as a result, gross domestic product (GDP) ultimately increases…

A: Change in investment=$100 Change in GDP=$200

Q: The transfer payment multiplier is smaller than the expenditure multiplier by the: O a. Transfer…

A: When talking about the multiplier impact of transfer payment and expenditure, it can be said that…

Q: In which of the following situations will an individual's purchasing power be unaffected? Select…

A: Purchasing power is the worth of a cash communicated with regards to the quantity of labor and…

Q: An economy has a consumption function of C = 20 + 0.75(YD), taxes = 10+0.2(Y), investment equal to…

A: Real GDP is the monetary value of all good and services produced in the economy which is being…

Q: By how much will Y* increase, if an increase in consumer confidence causes the consumption function…

A: Dear student, you have asked multiple questions in a single post. In such a case, I will be…

Q: A reduction in the tax rate might lead to an increase in the growth rate of potential output if... O…

A: Generally a reduction in tax rate is considered the fiscal expansionary role of central government…

Q: If the average propensity to consume is 0.75, and the marginal propensity to consume is 0.70, if…

A: Change in Consumption=Marginal Propensity to Consume×Change in Income Spending Multiplier=11-MPC As…

Q: If the marginal propensity to consume is equal to 0.70 and income rises by $20 billion in an…

A: The marginal propensity to consume measures the change in consumption when there is a change in the…

Q: What are the two equivalent formulas for investment multiplier? O A. 1 and MPC 1- MPS OB. 1- MPC MPC…

A: We know that aggregate output in closed economy is given by   Y = C+I+GWhere C =c+MPC×YSo Y=…

Q: Suppose that income increases by 17 units and the marginal propensity to save is 1/4 (i.e. 0.25).…

A: here we calculate the change in consumption  by using the consumption function so the calculation of…

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: Say, the expenditure multiplier for an economy is 2. An increase in government spending by $300…

A: here we calculate how much economy boost due to government expenditure , so the calculation of the…

Q: Suppose that the representative consumers pref- erences change, in that his or her marginal rate of…

A:

Q: When the general price level rises, Select one: O a. investment rises as a result of the multiplier…

A: The one reason due to which the aggregate demand curve slope downwards is the real wealth effect.…

Q: 5. Suppose the following information represents current economic conditions and behavior in some…

A: Note: Since more than one questions are posted and no special request from the student, we are going…

Q: Which of the following statements are correct? Select one: O a. Households smooth their consumption…

A: In macroeconomics, the household sector consumes the final items created by the production sector.…

Q: QUESTION 10 Assuming that the "equilibrium income" is $4,000 and the "full-employment" income is…

A: Government expenditure or expenditure includes all government consumption, investment and transfer…

Q: Question 6 If a lump-sum income tax of $35 billion is levied and the MPS is 0.40, the consumption…

A: Consumption schedule shows positive relationship between consumption spending and disposable income.…

Q: LAST WORD What is Say's law? How does it relate to the view held by classical economists that the…

A: Answer: Given that:   LAST WORD What is Say's law? How does it relate to the view held by classical…

Q: Question 20 $60 O $40 + * $20 + $50 100 150 200 Disposable Income(Y) -20 Refer to the diagram. The…

A: The average propensity to consume (APC) is a measure of how much money is spent instead of saved.…

Q: On a graph of a consumption function, what is the significance of the 45-degree line? O a. It…

A: Answer: a (It connects all points where desired consumption equals actual disposable income)…

Q: If the MPC is 4/5, and policy makers decide to increase taxes by $250 billion in order to slow an…

A: Given: The MPC is = 4/5 The taxes hiked by = $250 billion To Find: The change in GDP:

Q: If disposable income increases by $1 and consumption goes up by $0.80, we can conclude that... O a.…

A: Lord K.M.Keyes explains the relationship between consumption (C) and income (Y), it is known as the…

Q: When government spending increases by $1, planned expenditures increase by $1 O A. times the…

A: With the change in the government spending, the expenditure increases by the amount of expenditure…

Q: In the one-period, closed economy model, why does government spending crowd out private purchases? O…

A: Simply put, ‘People’s Collection’ means a fall in Investment due to rising interest rates caused by…

Q: A consumer has $280 to spend on two commodities, the first of which costs $2 per unit and the second…

A: Given  Price of good X (PX) = $2 Price of good Y (PY) = $5 Income (M) = $280 We know that  Budget…

Q: Let us represent consumption in the next period on the vertical axis and consumption this period on…

A: It is given that there are two periods present and future. Income for future period (Y2) is given on…

Q: Question 5 $60 $40- $20- $50 100 150 200 Disposable Income(Y) -20 Refer to the diagram. The average…

A: Disposable income is the sum of consumption and saving. Average propensity to consume is consumption…

Q: Assume that taxes depend on income and the MPC is 0.8 and tis 0.4. An increase in taxes of $10…

A: Calculate the tax multiplier as follows: Tax multiplier = -MPC/1-MpC +(MPC*t) =- 0.8/1-0.8+0.8*0.4 =…

Q: If the marginal propensity to consume is 0.8 and the government increases taxes by $1,000, the…

A: Answer (1)   Given Information   Marginal propensity to consume (MPC) is 0.8. And government…

Q: If, in an economy, a $200 billion increase in consumption spending creates $200 billion of new…

A: Marginal propensity to consume quantifies the induced consumption for every additional dollar of…

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…

Q: According to the text, a "multiplier" is used as an assessment and evaluation tool for several…

A: The proportion by which a particular variable increases/decreases as a response to fluctuations in…

Q: If real GDP is $13 trillion and planned aggregate expenditure is $13.5 trillion, inventories will be…

A: [1] If real GDP is $13 trillion and planned aggregate expenditure is $13.5 trillion, then…

Q: Suppose that Amazon decides to spend $10 million on a new distribution center. If the marginal…

A: To measure all the amount of goods and services produced at a given time in a country, gross…

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: In a simple model without government spending or taxation, if C = a +bY where C is consumer spending…

A: C=a+bY where a is the autonomous consumption i.e. even at zero level of income there will be some…

Q: QUESTION 13 Anna cares about her present and future consumption. Anna prefers consumption plan A to…

A: Anna thinks often about her present and future utilization. Anna inclines toward utilization plan A…

Q: If people expected that a fiscal policy in the form of a tax cut was temporary, then this policy's…

A: This policy would be weaker because it would be temporary.

Q: In an economy, autonomous consumption is $10. If Income is $90 and the mpc is 0.9, how much is…

A: Marginal propensity to consume refers to change in consumption with respect to change in income.…

Q: Suppose the following economy of Ravkan. C = Co + 0.6(Y – T) |= lo G = Go X = X0 M = M, + 0.1Y What…

A: Macroeconomics analyzes the economy as a whole. It studies aggregate economic concepts such as…

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.

Q: QUESTION 8 Leisure, I Consider the picture above, in which the consumer chooses to dedicate all of…

A: Here, the given graph shows the relationship between consumption and leisure choices of a consumer.

Q: How COVID-19 pandemic will affect the consumption behavior as well as the investment done by the…

A: Ans a)  Based on my opinion, during the COVID-19 epidemic, many homes will know they focus on their…

Q: Which of the following will NOT shift the ADTI curve? O a. A rise in government spending O b. A rise…

A: AD: Y= C+I+G+NX Y = National Income or output C= Consumption I = Investment G = Government Spending…