EBK ECON: MACRO4
4th Edition
ISBN: 9781305562097
Author: MCEACHERN
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Question
Chapter 9, Problem 2.4PA
Sub-Part
A
To determine
Effect of increase in Net taxes on the consumption function.
B
To determine
Effect of increase in interest rates on the consumption function.
C
To determine
Effect of increase in Consumer optimism, or confidence on the consumption function.
D
To determine
Effect of increase in the price level on the consumption function.
E
To determine
Effect of increase in consumer’s net wealth on the consumption function.
F
To determine
Effect of increase in Disposable income on the consumption function.
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- Which component of GDP will increase if disposable income increasesarrow_forwardIf consumption expenditures are $1800 million, gross investment is $450 million, imports are $350 million, exports are $180 million, government expenditure on goods and services is $120 million, and government transfer payments are $180 million and net taxes are $250 million; d) How much is the disposable income? e) Calculate the national savings.arrow_forwardThe MPC measures the relationship between: a change in consumption and a change in income. change in consumption and savings. changes in consumption and changes in savings. the proportion of income to consumption at any given level of income. the total level of consumption and the total level of saving.arrow_forward
- Write an essay discussing the determinants of national income, consumption, saving and investments, modelling the economy and the government sectorarrow_forwardWhat is usually the smallest component of spending in GDP in Australia? A) Consumption spending B) net export spending C) Government spending D) Investment spendingarrow_forwardWhich of the following components of consumption spending typically sees the largest decline in demand during a recession? automobiles food clothing housingarrow_forward
- If U.S. government statistics counted education spending as part of the investment, which of the following would rise, which would fall, and which would remain unchanged? You might use rise, fall, and stay unchanged more than once each or you might not. Consumption Investment Gross domestic productarrow_forwardconsider the following hypothetical economy. Consumption makes of 60% of national income, consumption totals $20 trillion. What is the level of GDParrow_forwardConsider the circular flow of expenditure and income in the Canadian economy. Which of the following is an injection into the circular flow? Select one: a. You make an online purchase from a U.S. retailer. b. Loblaws pays corporate income tax to the federal government. c. Bombardier exports subway cars to Mexico. d. Bombardier imports machine parts from Germany. e. You put $500 into your TFSA (tax-free savings account).arrow_forward
- Macmillan Education WORK IT OUT LaunchPad For interactive, step-by-step help in solving the following problem, vIsitLaunchPad by using the URL on the back cover of this book. The accompanying table shows gross domestic product (GDP), disposable income (YD), con- sumer spending (C), and planned investment spending (IPlanned) in an economy. Assume there is no government or foreign sector in this economy. Complete the table by calculating planned aggre- gate spending (AEplanned) and unplanned inven- tory investment (IUnplanned). 13. а, GDP YD C IPlanned AEPlanned lunplanned (billions of dollars) $0 $0 $100 $300 400 400 400 300 800 800 700 300 1,200 1,200 1,000 300 1,600 1,600 1,300 300 2,000 2,000 1,600 300 2,400 2,400 1,900 300 ? 300 2,800 2,800 2,200 3,200 3,200 2,500 300 b. What is the aggregate consumption function? c. What is Y*, income-expenditure equilibrium GDP?arrow_forwardDisposable income is the amount a household has A after subtracting autonomous spending. B after subtracting taxes and transfer payments to income. C sometimes called discretionary spending. D available for consumption spending and saving.arrow_forwardThe table given below shows the values of different components of aggregate expenditure of an economy. At the equilibrium level of gross domestic product (GDP), saving equals Table 9.2 (Trillions of Dollars) Real Net Disposable Consumption Saving Planned Government Net Planned GDP Таxes Income (C) (S) Investment Purchases Exports Aggregate (Y) (NT) (Y – NT) (I) (G) (X – M) Expenditures C+I+G+(X-M) 5.0 1.0 4.0 3.9 0.1 1.0 1.0 -0.7 5.2 5.5 1.0 4.5 4.3 0.2 1.0 1.0 -0.7 5.6 6.0 1.0 5.0 4.7 0.3 1.0 1.0 -0.7 6.0 6.5 1.0 5.5 5.1 0.4 1.0 1.0 -0.7 6.4 7.0 1.0 6.0 5.5 0.5 1.0 1.0 -0.7 6.8 O a. $0.2 trillion O b. $0.1 trillion O c. $0.3 trillion O d. $0.4 trillion O e. $0.5 trillionarrow_forward
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