EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 28.2, Problem 1QQ
To determine
Slope.
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The following table shows data for the economy before the decrease in saving. Suppose that the decrease in saving causes consumption to rise from $280 million to $320 million. Assume Say's law holds in this economy.
Fill in the data for the economy after the decrease in saving.
Before Saving Decrease
After Saving Decrease
Consumption (C)
$280 million
$320 million
Investment (I)
$200 million
$
million
Government Purchases (G)
$250 million
$
million
Exports (EX)
$500 million
$500 million
Imports (IM)
$300 million
$300 million
As a result of the decrease in saving, total expenditures will .
6. The marginal propensity to consume is:
A) the change in consumption divided by the change in income.
B) consumption divided by income.
C) the change in consumption divided by the change in saving.
D) The change in saving divided by the change in income.
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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- What is the vertical intercept of the consumpation function that represents the portion ofconsumption expenditure not associated with a level of disposable income?a. Consumption interceptb. Disposable income intercept c. Autonomous consumption d. Automatic consumption linearrow_forward7. The marginal propensity to save is 0.15, the marginal propensity to consume: (A) is 1.15. (B) is 0.85. (C) is 0.15. (D) cannot be determined by the given information.arrow_forward7arrow_forward
- 7. If the consumption function is C=80 + 0.6Y, the marginal propensity to save equals:(A) 0.6. (B) 0.4. (C) 0.5. (D) -0.4.arrow_forwardI need an experts answer to the attached imagearrow_forwardassume you are given a $100 raise, and decide to save $20 of that money. also assume that if you make zero income in a year, you will still spend $7000. a.) what is your consumption function? b.) if you earn $20000 in a year how much will you spend? c.) will you be able to save while earning the above income?arrow_forward
- Allie has a marginal propensity to consume of 0.75. What does this mean? a. He's spending more than he's making in income b. 75 cents of every additional dollar of his income is saved. c. 75 cents of every additional dollar of his income is spent on consumption. d. 25 cents of every additional dollar of his income is spent on consumption.arrow_forwardWhat is the marginal propensity to consume in this economy? Planned Government Net Exports Aggregate Change in Real GDP (Y) Consumption (C) Investment (1') Purchases (G) (NX) Expenditures (AE) Inventories 1500 1100 250 1600 1175 100 1700 1250 1800 1900 2000 75 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 0.65 0.75 0.85 d. 0.95arrow_forwardIf a household’s income falls from R20 000 to R17 000 and its consumption falls from R18 000 to R15 000, thenits:a) marginal propensity to consume is –0,67.b) marginal propensity to consume is 0,88.c) marginal propensity to consume is 0,20.d) marginal propensity to save is zero.e) marginal propensity to save is 0,12.arrow_forward
- Aina receives a tax refund of P800. He spends P600 and saves P200. Aina's marginal propensity to consume is: a. 0.6 b. 0.75 c. 0.25 d. 0.20arrow_forward500 1,000 Aggregate output, Y (billions of dollars) Figure 8.1 Refer to Figure 8.1. An increase in the MPC Select one: Oa shifts the saving function downward. Ob.makes the caving function fatte Oashifts the consumption function upard. .2.makes the consumption function fatter) billions of dollars)arrow_forwardFind out (i) if MPC is .75, what will be the MPS? (ii) if APS is .3, what will be the APC?arrow_forward
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