Use the figure to calculate the marginal propensity to consume (MPC) between point A and point B. MPC = (Enter your response as a real number 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)
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- Use the table below to answer the following questions. Real Consumptio GDP n $300 310 320 330 340 350 360 $290 298 306 314 322 330 338 (a) What is the size of the multiplier in this economy? Now, calculate the multiplier when the MPS is .5, .25, .10. What is the relationship between MPS and the multiplier? (b) If taxes were zero, government purchases were $10, investments $6, and net exports were zero, what is the equilibrium GDP? (c) If taxes are $5, government purchases are $10, investment is $6, and net exports are zero, what is the equilibrium GDP? (d) Assume that investment, net exports, and taxes are zero. Government purchases are $30, and the full-employment GDP without inflation is $330. How much must government spending be reduced to eliminate the inflationary expenditure gap?What is the relative importance of consumption spending (C) in aggreagte demand and some factors that affect it? What is the relative importance of investment spending (I) in aggreagte demand and some factors that affect it? What is the relative importance of government spending (G) in aggreagte demand and some factors that affect it? What is the relative importance of Net Export (NX) (Net Export = spending on exports (X) - imports (M)) in aggreagte demand and some factors that affect it?Use the figure to calculate the marginal propensity to consume (MPC) between point A and point B. MPC = 0.75. (Enter your response rounded to two decimal places.) O Real consumption spending ($ billions) Consumption and National Income $3,750- $2,250- m C $3,000 $5,000 Real national income or real GDP ($ billions)
- Domestic Output or Income (GDP = DI) Consumption $244 $240 250 250 260 256 270 262 280 268 290 274 300 280 310 286 320 292 6) Refer to the above table. The MPS and the multiplier A. 0.6 and 1.67 B. 0.4 and 2.5 C. 0.6 and 2.5 D. 0.4 and 1.67What is the expenditure multiplier in this economy? Planned Government Net Exports Aggregate Change in Real GDP (Y) Consumption (C) Investment (ı') Purchases (G) (NX) Expenditures (AE) Inventories 10000 8200 800 11000 9000 600 12000 9800 13000 14000 15000 800 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 3 4 C d 10Assume that, without taxes, the consumption schedule of an economy is as follows. Consumption, GDP, Billions Billions $ 100 $ 120 200 200 300 280 400 360 500 440 600 520 700 600 a. Graph this consumption schedule. Instructions: Use the tool provided 'CE' to plot the consumption schedule point by point (plot 7 points total). Consumption Expenditure 800 Tools 700 600 CE 500 400 300 200 100 45° 100 200 300 400 500 600 700 800 Real domestic product, GDP (billions of dollars) Consumption (billions of dollars)
- What are the four categories of aggregate expenditure (demand)? Give an example of each. 9.1 Calculate the Marginal Propensity to Consume and the Marginal Propensity to Save. Fill in the blanks in the following table. Show that the MPC plus the MPS equals 1. National Income & Real GDP (Y) Consumption (C) Saving (S) MPC MPS $9,000 $8,000 $10,000 $8,600 $11,000 $9,200 $12,000 $9,800 $13,000 $10,4002. From what was learned in class, explain what the values of the slope and vertical intercept of the aggregate consumption function mean from an economic perspective. Income-expenditure equilibrium Using the data in the following table to complete the following questions. GDP YD Planned (billions of dollars) $0 $0 $200 $100 400 400 500 100 800 800 800 100 1,200 1,200 1,100 100 1,600 1,600 1,400 100 2,000 2,000 1,700 100 2,500 2,500 2,000 100 3,000 3.000 2,300 100 1. Complete the columns for AEPlanned and unplanned in the table. 2. What is the value of the MPC? 3. What is the aggregate consumption function? AE Planned Unplanned 4. What is the equation for the planned aggregate expenditure function? 4. 5. What is the value of income-expenditure equilibrium GDP, (Y*)? 6. Explain in economic terms what happens when not in the income-expenditure equilibrium? Both when GDP > AE planned and GDP < AE planned. For each situation what needs to happen to move the economy toward equilibrium?.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…
- The gross domestic product (GDP) of Country A is $2 trillion in year 1. What value of investment will increase its GDP to $4.5trillion in year 2? (present your result in the nearest billion dollars, i.e., no decimal places) Assume that the average disposable income and consumption (in real $) of this country's citizen are provided in the table below. Year Income Consumption 1 60,000 50,000 64,726 51,259ingr Income (GDP = DI) $480 520 560 600 640 680 720 760 800 Consumption 512 536 560 504 608 632 b. If the MPC is 0.75? 656 680 704 Saving $-32 -16 0 16 32 48 64 80 96 What is the value of the marginal propensity to consume? APC Instructions: Round your answer to the nearest whole number. Change in GDP = billion. 1.067 0.990 0.880 APS -0.067 0.027 a. By how much will GDP change if firms increase their investment by $9 billion and the MPC is 0.9? Instructions: Round your answer to the nearest whole number. Change in GDP- 9 billion. 0.120EV Text Predictions: On The table below shows some of the expenditure amounts in the economy of Arkinia. The MPC, the MTR, and the MPM are all constant, as are the values of the three injections. a. Complete the table below. W 8 ZIN 200 SAN 400 500 GOO Aggregate expenditures ($billions) 700 HANS 800 600 HOD 200 T GO 1541 100 Accessibility: Investigate YD GB 200 460 620 C 400 130 195 Income (Sbillions) 325 The Economy of Arkinia 455 600 Search 5 800 -3 10 40 100 Tools MAL I se A SB 50 Se 58 50 30 50 Sa Draw a 45° line (labelled Y) and the aggregate expenditure function, labelled AE1. Identify expenditure equilibrium with the letter et. Use the tool "et" to show the expenditure equilibrium. Plot only the endpoints of Y and AE. Once all points have been plotted, click on the line (not individual points) and a tool icon will pop up. You can use this to enter exact co-ordinates for your points as needed. G 180 AE₁ IMO 180 THIN 13 180 186 tac taid X 50 sa SAMSUNG 50 10 50 50 54 549 50 IM 40…