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- Which of the following would not increase consumption spending? O Decreased disposable income. Increased household wealth O A lower interest rate O Expectations of greater future incomeWhat is the effect of an increase in investment? When investment increases, A. aggregate demand increases and income increases. The increase in income induçes an increase in consumption expenditure so aggregate demand increases by more than the initial increase in investment B. aggregate demand increases and aggregate supply increases C. aggregate demand increases by an amount equal to the increase in investment O D. aggregate supply increases. The increase in aggregate supply is greater than the increase in investment because capital increases, which increases potential GDP Click to select your answer. MacBook Air DII F11 F12 888 F10 F9 吕0 F7 F8 F6 F5 F4 esc F2 F3 F1 # $ delete @ 7 8 1 2 3 4 P Y Q W E R %3D tab つ K S D F G A aps lock M V B ootion * 00 I くOWhich of the following is NOT a component of planned aggregate expenditure? Select one: O a. Planned investment O b. Government purchases O c. Transfer payments d. Net exports O e. Consumption
- Disposable income Lütfen birini seçin: O A. decreases when income decreases O B. is always fixed. O C. all of the answers O D. increases when saving decreases O E decreases when net taxes decreaseSuppose that interest rates fall. This will cause: the present values of investment projects to fall; this will cause investment to rise a. Ob. the present values of investment projects to fall; this will cause investment to fall Oc the present values of investment projects to rise; this will cause investment to rise the present values of investment projects to rise; this will cause investment to fall Od.Economics PIODiem set is dde OIT AprTO 1. Let the following equations characterize the economy (note the addition of a tax rate on output): Y = 500 C = 60 + 0.8(Y-T) |= 30 - r G = 100 T = 0.4Y a) Calculate national saving, private saving, and public saving. b) Obtain the mathematical expression for the AD in this particular economy. Draw the graph. c) Determine the equilibrium interest rate (you can use the loanable funds market). Draw the graph for the lonable funds market. d) If Government spending increases to 120, what is the effect on income? Draw the new equilibrium in a graph (old and new in same graph).
- Which of the following will shift the consumption function upward? O a. An increase in disposable income O b. An increase in the interest rate O c. A decrease in disposable income O d. Expectations of lower prices in the future O e. A lower interest rateCThe following equations describe an economy C = 100 + 0.75 Y. I = 50 – 25i where C' is aggregate consumption , Y is disposable income, I is aggre gate investment, Tis taxes, G is go vernment purchases and i is the int erest rate. Derive the IS curve for th T= G= 50 e economy.| Assume in country Y, the average marginal propensity to save is 0.2. When the aggregate income is zero, consum- ers spend 50 to consume. Derive the saving function and consumption function for this country. What happens to consumption when the propensity to save decreases to 0.1? Explain your answer and show this on the graph.
- Inventories typically increase starting at the beginningof recessions, and begin to decline near the end ofrecessions. What does this say about the relationshipbetween planned spending and aggregate output overthe business cycle?10. T/F/U. Fear of a recession causes a decrease in investment spending—I— which in turn impacts v. Draw a graph consistent with your answer.Which of the following increases the size of the expenditure multiplier? a. a decrease in the marginal propensity to consume O b. a decrease in the marginal propensity to import О с. an increase in investment O d. an increase in autonomous spending
