Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
20th Edition
ISBN: 9780078021756
Author: McConnell, Campbell R.; Brue, Stanley L.; Flynn Dr., Sean Masaki
Publisher: McGraw-Hill Education
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Chapter 28.2, Problem 1QQ
To determine
Slope.
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if consumption function is C = 500 + 0.8Yd. Then, autonomous consumption is _____________
3. In relation to question no. 2, marginal propensity to save is ________
Please answer #2 and 3.
Suppose that the linear equation for consumption in a hypothetical economy is C = 40 + .8Y. Also suppose that income (Y ) is $400. Determine (a) the marginal propensity to consume, (b) the marginal propensity to save, (c) the level of consumption, (d ) the average propensity to consume, (e) the level of saving, and ( f ) the average propensity to save.
1. 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
Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
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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- Calculate the value of Consumption when average propensity to consume is 0.7 and the income is 700 (b) Can the value of APC greater than 1arrow_forwardGiven the Consumption Function C = 500 + 0.80Y, comppute the marginal propensity to consume and the marginal propensity to save of households?arrow_forwardGiven that national income is 80 crores and consumption expenditure 64 crores, find out the average propensity to save. When income rises to 100 crores and consumption expenditure to 78 crores. What will be the average propensity to consume and the marginal propensity to consume? Typed and correct answer please. I will rate accordingly.arrow_forward
- Give typing answer with explanation and conclusion Which of the following statements concerning consumption is incorrect? A. WEALTHY PEOPLE CONSUME MORE THAN OTHER PEOPLE. B. EXPECTATIONS ABOUT FUTURE PRICES AFFECT CONSUMPTION. C. MARGINAL PROPENSITY TO CONSUME USUALLY DECREASES AS INCOMES RISE. D. SAVINGS RATES DECREASE AS INCOME INCREASES. E. TAX INCREASES REDUCE CONSUMPTION.arrow_forwardThe average propensity to consume refers to the Group of answer choices percentage of income spent for current consumption expenditures for the minimum necessities of life percentage of income saved dollars of income spent for current consumption fact that people with higher incomes spend more for the necessities of lifearrow_forwardIf the consumption function is C = $800 billion + 0.8Y, a. what is the MPC? __ b. how large is autonomous consumption? $ __ billion c. how much do consumers spend with incomes of $4 trillion? $ __billion d. how much do they save? $ __ billionarrow_forward
- The marginal propensity to save is 0.15, tthe 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_forwardAssume consumption is represented by the following function: C=400+0.75Y. Also assume that planned investment (I) equals 100 and there are no government or taxes.arrow_forwardInitital $10 increase in investment expands GDP by $10 in first round of multiplier process. the 2nd round both GDP and Consumption rise $6. 1. what is the Marginal Propensity to Consume? 2. What is the size of the mulitplyer?arrow_forward
- Explain Consumption Function along with schedule and Graph. Explain why Marginal Propensity to Consume (MPC) of poor is greater than Rich?arrow_forwardThe government raises taxes by Rs. 100 billion. If the marginal propensity to consumeis 0.6, what happens to the following – do they rise or fall? By what amounts? a) Public Savingb) Private Savingc) National Savingarrow_forwardThe maginal propensity to consume of country is 0.8 and the country increases its investment by 5 billion. Calculate the marginal propensity to save.arrow_forward
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