What does the 45-degree line in the Aggregate Expenditures model represent? 1. a reference line where income equals spending 2. maximum consumption and maximum saving 3. all saving and no consumption 4. no consumption and no saving
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What does the 45-degree line in the Aggregate Expenditures model represent?
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- Suppose that disposable income, consumption, and saving in some country are $800 billion, $700 billion, and $100 billion, respectively. Next, assume that disposable income increases by $80 billion, consumption rises by $56 billion, and saving goes up by $24 billion. Instructions: In part a, round your answers to 2 decimal places. In part b, round your answers to 3 decimal places. a. What is the economy's MPC? MPC = What is its MPS? MPS = b. What was the APC before the increase in disposable income? АРС before%3D What was the APC after the increase? APC after =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 $10,4001.If the real GDP is 1000 and Investment is 150, Government Spending is 250 and Net Exports equals -100, then Consumption must be?
- The table below shows data for three fictitious countries. a. Compute the current MPC for each country. Instructions: Round your answers to two decimal places. Income and Consumption Data, Three Countries Change in Income (dollars) $9,830 40,000 5,870 Change in Consumption (dollars) $6,789 31,650 5,500 b. Which country has the highest marginal propensity to save (MPS)? (Click to select) c. If income in Bedrup increases by $360 and income in Cedrup increases by $690, which of the following statements is correct? Country Adrup Bedrup Cedrup MPC O Neither Bedrup nor Cedrup will save any dollars. O Cedrup will save more dollars. O Bedrup will save more dollars. O Dollar savings will be the same for both Bedrup and Cedrup.Use the following table. which represents the aggregate consumption function? Table: Individual and Aggregate Consumption Functions Current Consumer Spending Andy Fred Mark Disposable Income SO 1,000 $150 $100 $200 950 800 1,100 C = 450 + 0.7YD C = 150 + 0.9YD C= 250 + 0.8YD C = 450 + 0.8YDReal GDP Consumption Planned Investment Government Purchases Net Exports $5,000 $4,500 $500 $325 -125 6,000 5,300 $500 $325 -125 7,000 6,100 $500 $325 -125 8,000 6,900 $500 $325 -125 3 A Answer the questions based on the table below. The values are in millions of dollars. What is the equilibrium level of real GDP? What is the MPC? If potential GDP is $7,000 million, is the economy at full employment? If not, what is the condition of the economy? If the economy is not at full employment, by how much should government spending increase so that the economy can move to the full employment level of GDP?
- 13 hts 02:59:16 eBook Print References a. Fill in the missing numbers (gray-shaded cells) in the table. Instructions: In the table, enter your answers for consumption as a whole number. Round your answers for APC and APS to 4 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. Level of Output and Income (GDPDI) $240 260 280 300 320 340 360 380 400 Consumption Saving $-4 0 4 8 12 16 20 24 28 APC APS MPC MPSAssume an economy where spending for each sector is: Household: C = 800 +0.95Qd Business: I=3000 Public: G = 4,000, Tr = 7,000, Tx = 1,000 + 0.3Q Foreign X = 1,700 , Im = 200 + 0.165Q 2. Solve for autonomous spending 3. Spending Multiplier 4. Disposable Income 5. Consumption Expenditure 6. Household Saving 7. Imports 8. Net Exports 9. Government Expenditure 10. Budget DeficitIn an economy of a specific country, the economy's consumption schedule is given in the table below. GDP=DI C 6500 6680 6800 6840 7000 7000 7200 7160 7400 7320 7600 7480 7800 7640 8000 7800 Use the above table information to answer the questions of part 1: Part 1: 1. If disposable income were $7800, how much would be saved? 2. What is the "break-even" level of disposable income? 3. What is this economy's marginal propensity to consume? 4. What is the average propensity to consume when disposable income is $7000? When disposable income is $8000? Part 2: 5. Suppose a $100 increase in desired investment spending ultimately results in a $300 increase in real GDP. What is the size of the multiplier? 6. If the MPS is .4, what is the multiplier? 7. If the MPC is .75, what is the multiplier? 8. Suppose investment spending initially increases by $50 billion in an economy whose MPC is 2/3. By how much will this ultimately change real GDP?
- The following table provides data for output (real GDP) and saving. a. Fill in the missing numbers (gray-shaded cells) in the table. 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. Level of Output and Income (GDP = DI) Consumption Saving АРС APS MPC MPS $480 $-16 520 560 16 600 32 640 48 680 64 720 80 760 96 800 112 Instructions: Enter your answer as a whole number. b. What is the break-even level of income in the table? 2$ What is the term that economists use for the saving situation shown at the $480 level of income? |(Click to select) V c. For each of the following items, indicate whether the value in the table is either constant or variable as income changes: The MPS: (Click to select) V The APC: (Click to select) V The MPC: (Click to…The following table provides data for output (real GDP) and saving. a. Fill in the missing numbers (gray-shaded cells) in the table. 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. Level of Output and Income (GDP DI) Consumption Saving APC APS MPC MPS $240 $-2 260 280 2 300 4 320 6 340 8 360 10 380 12 400 14 Instructions: Enter your answer as a whole number. b. What is the break-even level of income in the table? What is the term that economists use for the saving situation shown at the $240 level of income? (Click to select) c. For each of the following items, indicate whether the value in the table is either constant or variable as income changes: The MPS: (Click to select) The APC: (Click to select) v The MPC: (Click to select) v The…Suppose GDP is $12 trillion, taxes are $3.6 trillion, private saving is $1.5 trillion, and public saving is $0.8 trillion. Assuming the economy is closed, complete the following table by calculating consumption, government purchases, national saving, and investment. Amount Component (Trillions of dollars) Consumption Government Purchases National Saving Investment Grade It Now Save & Continue Continue without saving