Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Question
Chapter 19, Problem 19SQ
To determine
The value of the spending multiplier.
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Given consumption = 100 +0.75Yd
Tax = 50 + 0.5Y
Export = 200
Import = 50 + 0.25Y
Government spending = 150
Investment = 200
(a) Determine the value of the economy’s multiplier, which is applicable to government spending, and interpret it.
(Multipliers) Suppose investment, in addition to having an autonomous component, also has a component that varies directly with the level of real GDP. How would this affect the size of the spending multiplier?
In Russia, the value of multiplier is 7
Calculate the value of MPS
Chapter 19 Solutions
Economics For Today
Ch. 19.4 - Prob. 1YTECh. 19 - Prob. 1SQPCh. 19 - Prob. 2SQPCh. 19 - Prob. 3SQPCh. 19 - Prob. 4SQPCh. 19 - Prob. 5SQPCh. 19 - Prob. 6SQPCh. 19 - Prob. 7SQPCh. 19 - Prob. 8SQPCh. 19 - Prob. 9SQP
Ch. 19 - Prob. 10SQPCh. 19 - Prob. 1SQCh. 19 - Prob. 2SQCh. 19 - Prob. 3SQCh. 19 - Prob. 4SQCh. 19 - Prob. 5SQCh. 19 - Prob. 6SQCh. 19 - Prob. 7SQCh. 19 - Prob. 8SQCh. 19 - Prob. 9SQCh. 19 - Prob. 10SQCh. 19 - Prob. 11SQCh. 19 - Prob. 12SQCh. 19 - Prob. 13SQCh. 19 - Prob. 14SQCh. 19 - Prob. 15SQCh. 19 - Prob. 16SQCh. 19 - Prob. 17SQCh. 19 - Prob. 18SQCh. 19 - Prob. 19SQCh. 19 - Prob. 20SQ
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Similar questions
- (Simple Spending Multiplier) For each of the following values for the MPC, determine the size of the simple spending multiplier and the total change in real GDP demanded following a $10 billion decrease in spending: a. MPC = 0.9 B. MPC = 0.75 C. MPC = 0.6arrow_forwardIf a $102 decrease in investment spending causes income to decline by $102 in the first round of the multiplier process and by $57 in the second round, the multiplier in the economy is ___________________.arrow_forwardCalculate the value of multiplier if change in income is $1100 million and the change in investment is $350 millionarrow_forward
- Q) Consider the multiplier model (in which the only component of expenditure that depends on income is consumption), and suppose that investment expenditures decrease by $50 million. All else equal, then the spending-balance level of output will A) increase by $50 million B) decrease by $50 million C) decrease by more than $50 million D) decrease by less than $50 million Explain it early and correctlyarrow_forward1. Explain briefly how spending can multiply, and then calculate the spending multiplier when the MPC isa. 0.75 b. 0.8 c. 0.6arrow_forward
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