Suppose that Amazon decides to spend $10 million on a new distribution center. If the marginal propensity to consume is .8, then how much wilI GDP go up by once the multfplier process has played out? O $10 million O $20 million O $40 million O 550 milion
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- Suppose that the level of GDP increased by $100 billion in an economy where the marginal propensity to consume is 0.5. The initial change in spending must have been: O $5 billion O $100 billion O $50 billion O $500 billionUse the table below to answer the following question. Income (Dollars) 20,000 24,000 O 0.75 What is the marginal propensity to consume? O 0.875 O 0.90 Consumption (Dollars) O 1.33 18,000 21,500Imagine there is a consumption smoother (also known as a PIH consumer) who expectsto live for another 40 years and to work for another 30 years. They just learned thatthey will receive a permanent pay increase from their job of $800. How much extra dothey consume this year? What is their marginal propensity to consume?
- If disposable income rises from $15,000 to $20,000 and the marginal propensity to consume equals 0.85, then saving must increase by: O $500 O $750 $1,000 O $2,000 O $4,250What is the initial change in consumption if an economy's MPC is 0.75 and there is a decrease in taxes of $1 billion? O $1.75 billion O $1 billion O $1.33 billion O $0.75 billionConsumption expenditures in the U.S. usually account for approximately 40 O 50 O 60 O 70 80 percent of GDP.
- What is the formula for the marginal propensity to expend? A aggregate expenditures/A national income O b. A autonomous expenditures/A national income O a. O c. A consumption/A national income O d. A national income/A induced expendituresThe difference between planned and unplanned spending is Select one: O a. always negative O b. unplanned changes in inventories O c inventories O d. always positiveIf Carol's disposable income increases from $1,200 to $1,700 and her level of saving increases from minus $100 to a plus $100, her marginal propensity to O save is 3/5. O consume is 1/2. O consume is 3/5. O consume is 2/5.
- Using the table1 below, calculate the marginal propensity (MPS) to save. Income Consumption (Dollars) (Dollars) 50,000 48,000 66,000 62,000 O a. 0.363 O b. 0.125 OC. 0.675 O d. 1.50When there's an increase in the cost of electricity for operating firms machines: O a. The investment demand curve will shift to the right O b. The consumption schedule will shift downward O c. The saving schedule will shift downward O d. The investment demand curve will shift to the leftWhich of the following changes in personal income tax would lead to the smallest increase in consumption? O a. O b. a $15 000 decrease in taxes, if MPC equals 0.6 O c. a $30 000 decrease in taxes, if MPC equals 0.25 Oe. a $20 000 decrease in taxes, if MPC equals 0.5 O d. a $12 000 decrease in taxes, if MPC equals 0.75 a $10 000 decrease in taxes, if MPC equals 0.2