EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 28, Problem 8RQ
To determine
Multiplier.
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Students have asked these similar questions
Suppose that Country X's government wants to increase output. If the multiplier equals 2.5
and the government increases spending by 300, how much will output increase by?
O 750
O 200
50
100
CF
1
2
3
4.
5
Disposable income (trillions of 2005 dollars)
In the above figure, at a disposable income level of $2 trillion, saving equals
Select one:
O a. $4 trillion.
O b. zero.
O c. consumption expenditures.
O d. disposable income.
6.
3 DT Processing of...pdf
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Consumption expenditure
(trillions of 2005 dollars)
5,
II
Which of the following changes in personal income tax would lead to the smallest increase in
consumption?
O a.
O b. a $15 000 decrease in taxes, if MPC equals
0.6
O c.
a $30 000 decrease in taxes, if MPC equals
0.25
Oe.
a $20 000 decrease in taxes, if MPC equals
0.5
O d. a $12 000 decrease in taxes, if MPC equals
0.75
a $10 000 decrease in taxes, if MPC equals
0.2
Chapter 28 Solutions
EP ECONOMICS,AP EDITION-CONNECT ACCESS
Ch. 28.2 - Prob. 1QQCh. 28.2 - Prob. 2QQCh. 28.2 - Prob. 3QQCh. 28.2 - Prob. 4QQCh. 28.5 - Prob. 1QQCh. 28.5 - Prob. 2QQCh. 28.5 - Prob. 3QQCh. 28.5 - Prob. 4QQCh. 28 - Prob. 1DQCh. 28 - Prob. 2DQ
Ch. 28 - Prob. 3DQCh. 28 - Prob. 4DQCh. 28 - Prob. 5DQCh. 28 - Prob. 6DQCh. 28 - Prob. 7DQCh. 28 - Prob. 8DQCh. 28 - Prob. 9DQCh. 28 - Prob. 1RQCh. 28 - Prob. 2RQCh. 28 - Prob. 3RQCh. 28 - Prob. 4RQCh. 28 - Prob. 5RQCh. 28 - Prob. 6RQCh. 28 - Prob. 7RQCh. 28 - Prob. 8RQCh. 28 - Prob. 9RQCh. 28 - Prob. 1PCh. 28 - Prob. 2PCh. 28 - Prob. 3PCh. 28 - Prob. 4PCh. 28 - Prob. 5PCh. 28 - Prob. 6PCh. 28 - Prob. 7PCh. 28 - Prob. 8PCh. 28 - Prob. 9PCh. 28 - Prob. 10P
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Similar questions
- Given that marginal propensity to save (MPS) is 0.5, what is the multiplier? O 2 O 4 0.5arrow_forwardDuring 2019, a country reported that its real GDP increased by $3.0 billion. If the slope of its aggregate planned expenditure curve is 0.9, then which of the following might have led to the increase in real GDP? O a. Investment decreased by $0.3 billion. on O b. Exports increased by $0.3 billion. O c. Exports decreased by $0.3 billion. O d. Imports increased by $0.3 billion. O e. Government expenditure on goods and services increased by $3 billion.arrow_forwardIf the multiplier is 4, what is the MPC? O 0.25 O 0.5 O 0.75 1arrow_forward
- A Moving to another question will save this response. Question 22 All figures in the table below are in billions. Assume that investment, , is not affected by the income GDP level. GDP Consumption + Exports Imports Investment $ 500 $ 525 $ 15 $ 10 550 560 15 10 600 595 15 10 650 630 15 10 700 665 15 10 750 700 15 10 The multiplier for this private open economy is O A. 2.00. O B. 3.33. O C. 2.50. O D. 1.25. A Moving to another question will save this response.arrow_forwardIf government spending rises by $100, mps = 0.2, then the GDP multiplier is O 5 O 4 O 1arrow_forwardAn economy has a consumption function of C = 20 + 0.75(YD), taxes = 10+0.2(Y), investment equal to 10, government expenditure equal to 15, exports equal to 15, and an import function of M = 10. 1) What is the equilibrium real GDP for this economy? O A. 156.25 O B. 146.88 Oc. 106.25 O D. 150.50 2) What is the multiplier for a change in government spending for this economy? O A. 3.5 O B. 2.5 O c. 3.0 O D. 4.0arrow_forward
- Intended Spending (billions) $2,300 $2,100 $1,900 $1,700 $1,500 The marginal propensity to consume is 01 O 19/21. O 2/3. O 5/7. 45% $1,500 $1,800 $2,100 $2,400 $2,700 Gross Domestic Product (billions) impossible to tell from the graph. Consumption plus investment Consumptionarrow_forwardPlanned Aggregate Spending (billions of dollars) 200 180 160 140 120 100 80 60 O 0.5 40 20 O 0.95 0 O 0.85 0 20 O 0.75 C 1 Question 8 40 1 1 1 1 O none of the answers given is correct A 7. What is MPC if this hypothetical economy were to move the macroeconomic poin A? B 45 degree line Planned AE New Planned AE 60 80 100 120 140 160 180 200 Real GDP (in billions of dollars)arrow_forwardRefer to the Table. The government spending multiplier in this economy is Planned Output (Income) Taves Consumption Savings Investment 1000 L100 Net Planned 200 680 120 200 200 140 200 200 1,200 200 200 200 840 160 1300 1400 1.500 920 200 200 200 LORO 200 1600 1,160 240 2. 4. 5. 10.arrow_forward
- ADVANCED ANALYSIS Assume that the consumption schedule for a private open economy is such that consumption C= 60 + 08Y Assume further that planned investment lo government spending G, and net exports X are independent of the level of real GDP nd constant at lg 40, G= 0, and Xp= 10. Recall also that, in equilibrium, the real output produced () is equal to aggregate expenditures: Y= C+lg+ G+ Xp Instructions: Round your answers to the nearest whole number. a. Calculate the equilibrium level of income or real GDP for this economy S 1050 b. What happens to equilibrium Yif lg changes to 20? 950 What does this outcome reveal about the size of the multiplier? Multiplier=arrow_forwardLAST WORD What is Say's law? How does it relate to the view held by classical economists that the economy generally will operate at a position on its production possibilities curve? Use production possibilities analysis to demonstrate Keynes's view on this matter.arrow_forwardRefer to the table. Equilibrium GDP is: Government Purchases Consumption (after taxes) $-20 Gross Investment Net Exports Real GDP $15 $10 10 $+5 $0 0. +5 15 10 20 10 +5 15 40 40 10 +5 15 70 60 10 +5 15 100 80 10 +5 15 130 100 10 +5 15 160 $40. O $70. O $100. O $130. $160 O O O O Oarrow_forward
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