Exploring Macroeconomics
8th Edition
ISBN: 9781544363332
Author: Robert L. Sexton
Publisher: Sage Publications
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Question
Chapter 16, Problem 7P
To determine
(a)
To compute:
The value of multiplier if the marginal propensity to consume was
To determine
(b)
To compute:
The value of multiplier if the marginal propensity to consume was
To determine
(c)
To compute:
The value of multiplier if the marginal propensity to consume was
Expert Solution & Answer
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If the marginal propensity to consume is 0.95,
Instructions: In part a, enter your response as a whole number. In part b, ent
a. What is the value of the multiplier?
b. What is the marginal propensity to save?
You Suppose the government increases education
spending by $20 billion. If the marginal propensity to
consume is 0.75, how much will total spending
increase?
Instructions: Round your response to one decimal place.
$ billion
Chapter 16 Solutions
Exploring Macroeconomics
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Similar questions
- The government raises taxes by $100 billion. If the marginal propensity to consume is 0.8 What happens to the following? Do they rise or fall? By what amounts? a)Investmentarrow_forwardThe value of marginal propensity to consume is 0.44 Calculate the value of Marginal propensity to save?arrow_forwardMonica's current income went up from $100.000 to $105,000 and she increased her current consumption by $2100. What is her marginal propensity to consume?arrow_forward
- An increase in the marginal propensity to consume will make the spending multiplier ? An increase in taxes as a portion of income will make the spending mitltiplierarrow_forwardAs the marginal propensity to consume (MPC) increases, As the marginal propensity to save (MPS) increases, the multiplier the multiplier remains the same. increases. decreases. decreases. increases. remains the same. If the marginal propensity to consume is 0.30, what is the multiplier, assuming there are no taxes or imports? Round to the tenths place.arrow_forwardWhat is individual Marginal Propensity to Consume and Marginal Propensity to Save? please provide an example for each.arrow_forward
- Economists often refer to the “multiplier effect.” What is the “multiplier effect,” and how is its magnitude related to the size of the marginal propensity to consume?arrow_forwardFor each of the following, please explain each step and show it in the graph! b. The Marginal Propensity to Consume (MPC) is 0,8 and the government wants total spending to increase by $40 Billion. How much the multiplier and initial spending must the government do to achieve the goal? (Assume economy is at full employment and economist ignore possibility of crowding out effect)arrow_forwardCalculate the value of Marginal propensity to save when it's given that MPC = 0.65arrow_forward
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