EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 8220103632225
Author: PARKIN
Publisher: PEARSON
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Question
Chapter 30, Problem 2MCQ
To determine
To identify:
The option which correctly states that about the marginal propensity to consume.
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What are the four categories of aggregate expenditure (demand)? Give an example of each.
9.1 Calculate the Marginal Propensity to Consume and the Marginal Propensity to Save. Fill in the blanks in the following table. Show that the MPC plus the MPS equals 1.
National Income & Real GDP (Y)
Consumption (C)
Saving (S)
MPC
MPS
$9,000
$8,000
$10,000
$8,600
$11,000
$9,200
$12,000
$9,800
$13,000
$10,400
Calculate the Marginal Propensity to Consume and the Marginal Propensity to Save. Fill in the blanks in the following table. Show that the MPC plus the MPS equals 1.
National Income & Real GDP (Y)
Consumption (C)
Saving (S)
MPC
MPS
$9,000
$8,000
$10,000
$8,600
$11,000
$9,200
$12,000
$9,800
$13,000
$10,400
What 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.
0.95
Chapter 30 Solutions
EBK FOUNDATIONS OF ECONOMICS
Ch. 30 - Prob. 1SPPACh. 30 - Prob. 2SPPACh. 30 - Prob. 3SPPACh. 30 - Prob. 4SPPACh. 30 - Prob. 5SPPACh. 30 - Prob. 6SPPACh. 30 - Prob. 7SPPACh. 30 - Prob. 8SPPACh. 30 - Prob. 9SPPACh. 30 - Prob. 1IAPA
Ch. 30 - Prob. 2IAPACh. 30 - Prob. 3IAPACh. 30 - Prob. 4IAPACh. 30 - Prob. 5IAPACh. 30 - Prob. 6IAPACh. 30 - Prob. 7IAPACh. 30 - Prob. 8IAPACh. 30 - Prob. 9IAPACh. 30 - Prob. 10IAPACh. 30 - Prob. 1MCQCh. 30 - Prob. 2MCQCh. 30 - Prob. 3MCQCh. 30 - Prob. 4MCQCh. 30 - Prob. 5MCQCh. 30 - Prob. 6MCQCh. 30 - Prob. 7MCQCh. 30 - Prob. 8MCQ
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- The table gives you information about the economy of Australia. Disposable income Saving Consumption expenditure (billions of dollars per year) 0 0 Calculate consumption expenditure at each value of disposable income and fill in the right column of the table. 100 25 200 50 Calculate the marginal propensity to consume. 300 75 The marginal propensity to consume is >>> Answer to 2 decimal places.arrow_forwardWhich of the following would be most likely to increase consumption spending? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a A reduction in consumer credit card debt b A drop in stock prices A higher interest rate d The expectation of lower future pricesarrow_forwardConsider the following economy. What is the mpc in this economy? Planned Government Net Exports Aggregate Change in Real GDP (Y) Consumption (C) Investment (I') Purchases (G) (NX) Expenditures (AE) Inventories 10000 8200 800 11000 9000 600 12000 9800 13000 14000 15000 800 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 0.50 b 0.75 C 0.80 d 0.90arrow_forward
- The multiplier is the ratio of the change in ________ to a change in ________. Select one: a. the level of saving; the level of consumption b. autonomous consumption; induced consumption c. the MPC; the MPS d. the equilibrium level of output; some autonomous variablearrow_forwardWhich of the following would be most likely to increase consumption spending? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a A reduction in consumer credit card debt A drop in stock prices A higher interest rate C d The expectation of lower future pricesarrow_forwardConsumption and Saving- End of Chapter Problem Which one of the following reasons makes it easier to forecast the impact of an income change on consumption for hand-to-mouth consumers than for consumption smoothers? It is easier because hand-to-mouth consumers only spend their permanent income. hand-to-mouth consumers save a large portion of their income. the marginal propensity to consume is 1 for consumption smoothers. hand-to-mouth consumers spend their entire income as they earn it.arrow_forward
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- Macroeconomics Question No.2 Suppose the consumption function is given by C = 100 + 0.8YD and that I = 50, while G=200, TR=62.5 and t=0.25. What is the equilibrium level of income? What is the level of saving in equilibrium? If investment were to rise to 150, what would be the effect be on equilibrium income. What is the value of multiplier in part a. and c. Draw a diagram indicating the equilibrium in part a. and c.arrow_forwardThe table below provides Income and consumption Data in billions of dollars. Answer question below based on it.Disposable Consumption SavingsIncome100 80 --------200 150 --------- Using information from question 21, calculate the marginal propensity to consume for the economy?arrow_forwardWhich of the following would be most likely to increase consumption spending? Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a A reduction in consumer credit card debt b A drop in stock prices c A higher interest rate d The expectation of lower future pricesarrow_forward
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