Use the figure to calculate the marginal propensity to consume(MPC) between point A and point B.MPC = 0.75. (Enter your response rounded to two decimal places.)OReal consumption spending ($ billions)Consumption and National Income$3,750-$2,250-mC$3,000$5,000Real national income or real GDP ($ billions)

The Marginal Propensity to Consume (MPC) represents the fraction of an additional unit of income…

Use the figure to calculate the marginal propensity to consume (MPC) between point A and point B. MPC = 0.75. (Enter your response rounded to two decimal places.) Real consumption spending ($ billions) Consumption and National Income $3,750- $2,250+ A B $3,000 $5,000 Real national income or real GDP ($ billions)

Use the figure to calculate the marginal propensity to consume (MPC) between point A and point B. MPC = 0.75. (Enter your response rounded to two decimal places.) Real consumption spending ($ billions) Consumption and National Income $3,750- $2,250+ A B $3,000 $5,000 Real national income or real GDP ($ billions)

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.A: The Simple Algebra Of Income Determination And The Multiplier

Problem 4TY

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6. Consider the following economy: C= 100+0.8Y, I = 200, G = 125, NX= 75. (a) Compute the equilibrium GDP (b) If the government decides to increase the spending by $30, how much will be the impact on equilibrium GDP? (Hint: Spending multiplier = 1/1 - MPC)
What is the relative importance of consumption spending (C) in aggreagte demand and some factors that affect it? What is the relative importance of investment spending (I) in aggreagte demand and some factors that affect it? What is the relative importance of government spending (G) in aggreagte demand and some factors that affect it? What is the relative importance of Net Export (NX) (Net Export = spending on exports (X) - imports (M)) in aggreagte demand and some factors that affect it?
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(o) Calculate MPC, MPS and APC from the following data: Income (Y) Consumption 100 95 110 104
1 Instructions: In the table, enter your answers for consumption as a whole number. Round your answers for APC and APS to 3 decimal places. Round your answers for MPC and MPS to 1 decimal place. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers eBook Level of Output and Income (GDP = DI) $480 520 560 600 640 680 720 760 800 Consumption 512 536 560 584 608 632 650 680 704 Saving $-32 -16 0 16 32 48 V 64 80 96 Instructions: Enter your answer as a whole number. b. What is the break-even level of income in the table? APC 1.067 1.000 0.973 0982 0978 0974 880 APS -0.067 0.000 0 027 0071 0089 0.105 0.120 MPC 0.6 06 0.6 0.6 0.6 0.6 06 0.6 MPS 560 What is the term that economists use for the saving situation shown at the $480 level of income? 0.4 04 04 04 04 04 0.4 04 Dissaving c. For each of the following items, indicate whether the value in the table is either constant or variable as income changes: The MPS: Constant The APC: Variable…
in an imaginary economy, there is no foreign trade and no government activity. APC = MPC = 0.08. In equilibrium, consumption expenditure is Rs,20, 000 Million. (a) What is ihe level of invesiment expenditure? (b) What is the value of the multiplier (c) Suppose investment spending remains unchanged but both APC and MPC fall to 0.06, what is the new equilibrium level of national income?
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