ECON MACRO
5th Edition
ISBN: 9781337430401
Author: William A. McEachern
Publisher: Cengage Limited
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Question
Chapter 9, Problem 1.2P
To determine
Value of MPC, Relationship between MPC and MPS, If MPC increases, what happens to MPS,MPC related to consumption function and MPS related to saving function.
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Students have asked these similar questions
Very briefly summarize the relationships shown by (a) the consumption schedule, (b) the saving schedule, (c) the investment demand curve, and (d) the multiplier effect. Which of these relationships are direct (positive) relationships and which are inverse (negative) relationships? Why are consumption and saving in the United States greater today than they were a decade ago?
The table shows disposable income and saving in an economy.
Calculate consumption expenditure at each level of disposable income.
Over what range of disposable income is there dissaving? Estimate the
level of disposable income at which saving is zero.
>>> Answer to 1 decimal place.
Disposable income
0
(trillions of dollars)
Saving
10
20
30
40
53--35
50
5
When disposable income is $30 trillion, consumption expenditure is $
trillion.
Suppose two successive levels of disposable personal income are $16 and $21 billion, respectively, and the change
in consumption spending between these two levels of disposable personal income is $2 billion, then the MPC will
be equal to?
0.12
0.8
0.7
0.4
0.04
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Similar questions
- How is it possible for consumption expenditure to be positive even when disposable income is zero?arrow_forwardCalculate 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 $10,400arrow_forwardAsaparrow_forward
- I consumed all my income at every level of income.Draw my consumption and saving function.What are my MPC and MPS? Explain why it must always be true that MPC+MPS equal to 1?arrow_forwardThe following table shows income and consumption: Calculate: A- Saving (S), B- Marginal propensity to consume (MPC), C-Marginal propensity to save (MPS), D- Average propensity to consume (APC) E- Average propensity to save (APS).arrow_forwardSuppose that disposable income, consumption, and saving in some country are $400 billion, $350 billion, and $50 billion, respectively. Next, assume that disposable income increases by $40 billion, consumption rises by $36 billion, and saving goes up by $4 billion. Instructions: In part a, round your answers to 2 decimal places. In part b, round your answers to 3 decimal places. a. What is the economy's MPC? MPC = What is its MPS? MPS = b. What was the APC before the increase in disposable income? APC before = What was the APC after the increase? APC after =arrow_forward
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