MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Chapter 8, Problem 9SQ
To determine
The sum of MPC and MPS.
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If the marginal propensity to save is 0.15 in an economy, a $15 billion rise in consumption spending will increase:
A GDP by $20 billion.
B saving by $25 billion.
C GDP by $100 billion.
D GDP by $18 billion.
Explain why the sum of marginal propensity to consume and marginal propensity to saving it's equal to one?
The government raises taxes by $100 billion. If the marginal propensity to consume is 0.8 What happens to the following? Do they rise or fall? By what amounts?a. Public saving. b. Private saving. c. National saving
Chapter 8 Solutions
MACROECONOMICS FOR TODAY
Ch. 8.4 - Prob. 1YTECh. 8 - Prob. 1SQPCh. 8 - Prob. 2SQPCh. 8 - Prob. 3SQPCh. 8 - Prob. 4SQPCh. 8 - Prob. 5SQPCh. 8 - Prob. 6SQPCh. 8 - Prob. 7SQPCh. 8 - Prob. 8SQPCh. 8 - Prob. 9SQP
Ch. 8 - Prob. 1SQCh. 8 - Prob. 2SQCh. 8 - Prob. 3SQCh. 8 - Prob. 4SQCh. 8 - Prob. 5SQCh. 8 - Prob. 6SQCh. 8 - Prob. 7SQCh. 8 - Prob. 8SQCh. 8 - Prob. 9SQCh. 8 - Prob. 10SQCh. 8 - Prob. 11SQCh. 8 - Prob. 12SQCh. 8 - Prob. 13SQCh. 8 - Prob. 14SQCh. 8 - Prob. 15SQCh. 8 - Prob. 16SQCh. 8 - Prob. 17SQCh. 8 - Prob. 18SQCh. 8 - Prob. 19SQCh. 8 - Prob. 20SQ
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- The value of marginal propensity to consume is 0.44 Calculate the value of Marginal propensity to save?arrow_forwardSuppose that GDP is $8 billion, taxes are $1.5 billion, private saving is $0.5 billion, and public saving is 0.2 billion. Assuming the economy is closed, calculate the size of:(i) Consumption (ii) Investment (iii) Government Spending (iv) National Savings b. Explain the difference between saving and investment as defined by a macroeconomist. c. Which of the following situations in c (i) & c (ii) represent investment? Saving? Explain(i) Your family takes out a mortgage and buys a new house. (ii) You use your paycheque to buy stock in Sagicor Financial Services.arrow_forwardExplain the difference between saving and investment as defined by a macroeconomist. Which of the following situations represent investment and which represent saving? Explain.a. Your family takes out a mortgage and buys a new house.You use your $200 paycheck to buy stock in Africel.Your roommate earns $100 and deposits it in his account at a bank.You borrow $1,000 from a bank to buy a car to use in your pizza delivery business.The interest rate is 7 percent. Use the concept of present value to compare $200 to be received in 10 years and $300 to be received in 20 years.A company has an investment project that would cost $10 million today and yield a payoff of $15 million in 4 years.Should the firm undertake the project if the interest rate is 11 percent? 10 percent? 9 percent? 8 percent?Can you figure out the exact cutoff for the interest rate between profitability and nonprofitability?arrow_forward
- Given the Consumption Function C = 500 + 0.80Y, comppute the marginal propensity to consume and the marginal propensity to save of households?arrow_forwardThe marginal propensity to save is 0.55 What is the value of Marginal propensity to consumearrow_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_forward
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- Given 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_forwardThe value of Marginal propensity to consume is double the value of Marginal propensity to save. Find the value of multiplierarrow_forwardThe Average Propensity to Save is: A. the percentage of income that is saved B. the percentage of income that is consumed C. the percentage of income that is spent D. the percentage of income that is investedarrow_forward
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