What is the difference between consumption and autonomous consumption?

Q: Explain why investment (I) varies more from year-to-year than consumption (C).

A: Lets understand the factors on which the investment depends: 1. Marginal efficiency of capital: It…

Q: Do you think that the marginal propensity to consume out of current income differs between tenured…

A: The marginal propensity to consume out of current income differs between tenured professors who have…

Q: What is the effect of an increase in expected future income on the consumption function?

A: Increase in expected future income have certain effect on current consumption.

Q: How would an increase in the interest rate affect consumption and investment function?

A: Consumption signifies the amount of currencies spent on buying current goods and services by the…

Q: Explain the difference between induced consumption expenditure and autonomous consumption…

A: Expenditure incurred by the consumers for consumption irrespective of their income is termed as…

Q: Elaborate on the concept of consumption puzzle?

A: Consumption puzzle is that when the economy is growing it leads to increase the national income by…

Q: ind MPC in the given consumption function Y=100+0.8Yd

A: The provided consumption function is: Y=100+0.8Yd

Q: Construct a consumption function from the data given here and determine the MPC. Given the…

A: Consumption function shows the relationship between disposable income and consumption.

Q: What

A: # investment multiplier is given as the inverse ratio of the marginal propensity to save.…

Q: What does the consumption function show

A: In an economy, households are the people who serve their services as labor or as a self-employed…

Q: Clearly explain the characteristics of the consumption function.

A: Consumption Function is defined as C=c¯+bY where  c¯ is autonomous consumptionb is marginal…

Q: Elaborate three determninants in which consumption can be increased according to the consumption…

A: Consumption is characterised as utility acquisition spending.

Q: How to calculate marginal propensity to consume

A: The marginal propensity to Consume is the metric that quantifies the induced consumption of the…

Q: If there is an increase in the personal income tax rate, and people do not receive a pay increase,…

A: The tax is a unilateral payment made by the public towards the government for various purposes such…

Q: Investment increases by $200 million and the value of MPC is 0.75. What would be the total increase…

A: Total increase in spending = multiplier * increase in spending Multiplier= 1/(1-MPC)…

Q: What is the multiplier effect and how is it beneficial to the economy?

A: The multiplier effect shows the change in final income due to an injection of spending. For example,…

Q: Using a suitable graph, what is the effect on national income if people increase autonomous saving?

A: Aggregate demand (AD) is the sum total amount of commodities and services demanded in an economy at…

Q: What is an investment schedule and how does it differ from an investment demand curve?

A: The capital stock is an accumulation of capital assets( like plant and machinery, etc)  that helps…

Q: Use the graph to answer the questions that follow. a.What is the value of the MPC? b.What is the…

A: MPC = Marginal propensity to consume MPS = Marginal propensity to save Multiplier = 1 / 1 - MPC…

Q: If the investment increases by 185 and the national income increases by 1200 billion what would be…

A:

Q: Explain what happens to consumption, investment, and the interest rate when the government increases…

A: Taxes: These are primary sources of income for the government.

Q: Give any two example of the capital expenditures!

A: In an economy, capital expenditure refers to the amount of money that spend on durable assets that…

Q: How is it possible for consumption expenditure to be positive even when disposable income is zero?

A: The consumption function gives the relationship between consumption and disposable income.

Q: Why does a downshift of the consumption schedule typically involve an equal upshift of the saving…

A: Consumption schedule shows the amount of income spent on consumption. Saving schedule shows the…

Q: Historically, the change in real GDP during recessions has been a. mostly a change in investment…

A: Real GDP - It is the measure that reflects the inflation adjusted value of goods and services…

Q: What is the level of aggregate expen level of income? Graph the aggregate expenditures function.

A: Aggregate expenditure is the sum of consumption, investment, government spending, and net exports.…

Q: How much more would you spend if you won a $1,000 lottery prize?  Why might your average and…

A: Marginal Propensity to Consume (MPC) refers to the change in consumption due to the change in…

Q: Create a diagram to explain the three main characteristics of the consumption function.

A: The consumption function shows the relationship between the consumption and level of income.

Q: What is the value of multiplier?

A: Multiplier depicts the change of one factor on the other with different amounts. The multiplier can…

Q: Graphically illustrate the aggregate consumption and saving functions. Explain

A: The consumption is the using of the income and resource to purchase the commodities and services…

Q: Calculate the value of MPC given that:- MPS = 0.55

A: # We get the relationship between MPC and MPS as:- MPS + MPC = 1

Q: If MPC and MPS are equal, what is the value of multiplier?

A: MPS stands for marginal propensity to save and MPC stands for marginal propensity to consume.

Q: Explain the difference between induced consumption expenditure and autonomous consumption…

A: Consumption expenditure is the expenditure incurred by the household sector on the purchase of final…

Q: If the value of MPS and MPC is same. What will be the value of multiplier

A: The information being given to us is as follows:- The value of Marginal propensity to save and…

Q: Why is consumption spending insufficient to explain economic growth and rising standards of living?

A: Economic growth basically defined as a rise in real GDP, or the value of national production,…

Q: Please explain how a rise in the household saving rate can cause a fall in GDP?

A: Gross domestic product is the monetary value of all total goods and services produced domestically…

Q: Briefly discuss the following concepts iv. Government expenditure multiplier v. Potential output

A: Economics is related to the production, distribution, and consumption of goods and services.

Q: What are the justifications for imposing tax on consumption instead of income by the government of…

A: Consumption tax argue that it encourages saving and investment and makes the economy more efficient.…

Q: Find the value of MPC if MPS is 0.4.

A: Given: Marginal propensity to save = 0.4

Q: What do you mean by multiplier

A: In macro economics, increase in final income arising from an injection of new demand is with…

Q: What is the impact of an increase in taxes on the interest rate, income, consumption and investment?

A: The consumption depends on the income of a person. If the income of a person increases then the…