QUESTION 5 Which of the following describes the consumption function in the IS curve? ac, = a +bR₂ a. b. C₂ =ā, c. C₂ = ā Ⓒd. C₂ =ā Ÿ₂ - BR Ⓒe.c, =ā Ÿ₂
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- 1. a. Explain consumption and saving function by using numerical example and diagram.hich theory of consumption best explains the consumption behavior of consumers of our economy? Question No: 02 [Marks: 10] If the State Bank started printing large quantities of Pakistani Rupees (Rs), what would happen to the number of Pakistani Rupees a dollar could buy? Why? Question No: 03 [Marks: 10] Deseribe the difference batuuean foreian diract investmet and foraion nortfolie invastment Who is mora likelu toA Moving to another question will save this response. Question 12 Assume the following consumption schedule: C= 20 + 0.9 Y, where C is consumption and Yis disposable income. At $1,100 level of disposable income: (show your calculations) a. Find out the level of saving and consumption? b. How much are the APC and APS (to one decimal place)? ( c. If disposable income increased to $2,800 and saving is $345 now. What are MPC and MPS (to two decimal places)? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Arial 10pt A V 血 x² X2 深| T [区 田田 田E图|言()
- The accompanying graph represents the aggregate consumption function for the small island nation of Pineapple Paradise. The people of Pineapple Paradise expect their future 10,000 disposable income to increase. Use the graph to show an 9,000 increase in consumption expenditures. 8,000 7,000 What is the new level of aggregate autonomous consumer ,000 Aggregate Consumption Function spending? ,000 $2000 4,000 $4000 3,000 $1000 O $3000 2,000 1,000 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Disposable Income Çonsumer Spending,Assume the following consumption schedule: C= 20 + 0.9 Y, where C is consumption and Y is disposable income. At $1,100 level of disposable income: (show your cacuators) a. Find out the level of saving and consumption? b. How much are the APC and APS (to one decimal place)? c. If dispr able income increased to $2,800 and saving is $345 now. What are MPC and MPŚ (to two decimal places)?assume you are given a $100 raise, and decide to save $20 of that money. also assume that if you make zero income in a year, you will still spend $7000. a.) what is your consumption function? b.) if you earn $20000 in a year how much will you spend? c.) will you be able to save while earning the above income?
- One of these four answers best explains the effect of disposable income on consumption. Which one? O Disposable income does not determine consumption. O Disposable income is the most powerful determinant of income and determines how much an individual consumes. O When an individual has more disposable income, he or she is likely to consume less. O Disposable income is an important determinant of expected future income.if we are studying the relationship .4 between consumption (C) and disposable income (Yd), wealth (W) then we reach the following results Ci=20+ 0.75*Ydi + 0.01*Wi if Ydi=1000, wealth =10000 and disposable income Yd increase by 100 then consumption will change * ???????????????byWhat is the vertical intercept of the consumpation function that represents the portion ofconsumption expenditure not associated with a level of disposable income?a. Consumption interceptb. Disposable income intercept c. Autonomous consumption d. Automatic consumption line
- Consumption and Savings Functions Disposable Income Consumption Saving -50 100 200 400 a. Please complete the table (assume linear functions) b. How much is Autonomous Consumption and Autonomous Savings? C. How much is mpc, mps, and E ? Write out the consumption funetion and the savings function, Using the data from the table, please graph the consumption and savings schedules in a model. d. e. For an increase in disposable income of $2000, using the current mpc, show five rounds of increases in planned expenditure. f.Which of the following is not a valid expenditure function? OU P.P, O UP, O None of these can be expenditure functions O (P. + P,) VŨ P+PQuèstion 4 "As disposable income increases, consumption:" O And saving both increase. O Decreases and saving increases. O And saving both decrease. O Increases and saving decreases.
