An economy's consumption function is depicted in the table below. Disposable Income (Y) ($ billions) 0 125 250 375 500 625 OA. -0.10. Planned Investment ($ billions) 20 20 20 20 20 20 a. When disposable income is equal to $250 billion total expenditures (including investment) equal OA. $250 billion. OB. $295 billion. b. Therefore, in this model when investment is included, when the disposable income is $250 billion, saving must be equal to OB. $20 billion. OC. $275 billion. Consumption (C) ($ billions) OC. $-25 billion. 100 188 275 363 450 538 D. $20 billior OD. $-45 billic

An economy's consumption function is depicted in the table below. Disposable Income (Y) ($ billions) 0 125 250 375 500 625 OA. -0.10. Planned Investment ($ billions) 20 20 20 20 20 20 a. When disposable income is equal to $250 billion total expenditures (including investment) equal OA. $250 billion. OB. $295 billion. b. Therefore, in this model when investment is included, when the disposable income is $250 billion, saving must be equal to OB. $20 billion. OC. $275 billion. Consumption (C) ($ billions) OC. $-25 billion. 100 188 275 363 450 538 D. $20 billior OD. $-45 billic

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The following table shows data for the economy before the decrease in saving. Suppose that the decrease in saving causes consumption to rise from $280 million to $320 million. Assume Say's law holds in this economy. Fill in the data for the economy after the decrease in saving. Before Saving Decrease After Saving Decrease Consumption (C) $280 million $320 million Investment (I) $200 million $ million Government Purchases (G) $250 million $ million Exports (EX) $500 million $500 million Imports (IM) $300 million $300 million As a result of the decrease in saving, total expenditures will .
An economy's consumption function is depicted in the table below. Disposable Income (Y) Planned Investment Consumption (C) ($ billions) ($ billions) ($ billions) 0 50 120 50 240 50 360 50 480 50 600 50 a. When disposable income is equal to $240 billion total expenditures (including investment) equal OA. $342 billion. OB. $50 billion. b. Therefore, in this model when investment is included, when the disposable income is $240 billion, saving must be equal to OB. $-102 billion. O C. -0.22. OA. $-52 billion. 100 196 292 388 484 580 OC. $240 billion. OD. $292 billion. OD. $50 billion.
1. Complete the accompanying table with disposable income (DI) and consumption (C) schedules for a private, closed economy. All figures are in billions of dollars. DI Consumption Saving АРС APS MPC MPS 8. 40 40 80 72 120 104 160 136 200 168 240 200 (a) Refer to the above data. If plotted on a graph, the slope of the consumption schedule would be: (b) The break-even level of income is ($ ) where saving equals ( $ :). Households dissave ( $ ). Dissaving occurs at the lowest levels of income as households spend ( more, less ) than they receive in disposable income. This dissaving could occur with households liquidating (selling for cash) their assets or borrowing money. As income rises we see that savings ( increases, decreases ) by a greater and greater amount. (c) If consumption increases by $10 billion at each level of disposable income, the average propensity to consume (APC) will ( change, unchange) and/but the marginal propensity to consume (MPC)will ( change, not change). (d) (APC,…
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?
Problem 1. Calculate APC, MPC, MPS and APS from the following data: Income (Y) Consumption (C) (8) 1000 900 1200 1060
1) Personal consumption expenditures in billions of dollars are A) 900. B) 1,100. C)1400 D) 1,600. 2) The value for gross private domestic investment in billions of dollars is A) 740. B) 810. C) 850. D)890
Assuming there is no government or foreign sector, [1 / 1- MPC] represents a. the consumption function.b. the saving function.c. the multiplier.d. break even income
point(s) possible The table has data from the nation of Atlantica. Disposable income (trillions of 2012 dollars) Consumption expenditure (trillions of 2012 dollars) 0.0 1.5 2.0 3.0 4.0 4.5 6.0 6.0 8.0 7.5 Based on these data, when disposable income equals $8.0 trillion, there is O A. saving of $0.5 trillion. B. dissaving of $15.5 trillion. O C. dissaving of $7.5 trillion. O D. saving of $15.5 trillion. O E. dissaving of $0.5 trillion.
ADVANCED ANALYSIS Linear equations for the consumption and saving schedules take the general form C= a+ bY and S=-a+ (1- b) Y, where C, S, and Yare consumption, saving, and national income, respectively. The constant a represents the vertical intercept, and b represents the slope of the consumption schedule. a. Use the following data to substitute specific numerical values for a and b in the consumption and saving equations. National Income (Y) Consumption (C) $ 70 100 140 210 200 300 280 350 480 Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers: b. What is the economic meaning of b? MPC What is the economic meaning of (1- 6)?
2. The marginal propensity to save is 0.15, the marginal propensity to consume:(A) is 1.15. (B) is 0.85. (C) is 0.15. (D) cannot be determined by the given information.
7. The marginal propensity to save is 0.15, the marginal propensity to consume: (A) is 1.15. (B) is 0.85. (C) is 0.15. (D) cannot be determined by the given information.
Problem 2. Complete the following table: Income (Y) Consumption (C) АРС MPS (7) 2,000 1,900 3,000 2,700