If autonomous planned investment increases by $100, and the MPC = 0.8, in the first round of spending GDP will increase by ___ and lead to an increase in consumer spending of ___. The second round of increase in GDP will be ___. A. $80; $80; $64 B. $100; $100; $80 C. $100; $80; $80 D. $80; $64; $64
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If autonomous planned investment increases by $100, and the MPC = 0.8, in the first round of spending
A. $80; $80; $64
B. $100; $100; $80
C. $100; $80; $80
D. $80; $64; $64
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- If the consumption function is C = $800 billion + 0.8Y, a. what is the MPC? __ b. how large is autonomous consumption? $ __ billion c. how much do consumers spend with incomes of $4 trillion? $ __billion d. how much do they save? $ __ billionAggregate Expenditures and Multipliers Assignment a. Using the aggregate expenditure function above, what is the current level of real GDP? b. Using the aggregate expenditure function above, what would be the level of real GDP if the aggregate expenditure function shifted up by $0.2T? c. If Investment expenditures increase by $300B and MPC is equal to 0.90, what will be the increase in real GDP? d. If Government expenditures increase by $800B and MPS is equal to 0.05, what will be the increase in real GDP?The table shows disposable income and consumption expenditure in an economy. Calculate saving when disposable income equals $200 billion. Over what range of disposable income does consumption expenditure exceed disposable income? Calculate autonomous consumption expenditure. >>> Answer to 1 decimal place. When disposable income is $200 billion, saving is______billion dollars. >>> If your answer is negative, include a minus sign. If your answer is positive, do not include a plus sign. When disposable income is greater than $800 billion, consumption expenditure exceeds disposable income. Autonomous consumption expenditure equals$___billion. Disposable income Consumption expenditure (billions of dollars) 200 350 400 500 600 650 800 800 1,000 950
- Assume that the Equilibrium GDP is $4,000 billion. The Potential GDP is $5,000 billion. The marginal propensity to consume is 4/5 (0.8). By how much and in what direction should government purchases be changed? a. increase by $1,000 billion. c. increase by $100 billion. b. decrease by $1,000 billion. d. increase by $200 billion.Consider the following consumption function: C = 800 + 0.75 YD for the fictitious economy of Zapland. If the government increases transfer payments by $200 million what is the change in GDP? Assume that there is no increase in the price level. Select one: a. $300 million b. $500 million c. $600 million d. $400 million e. -$600 millionSuppose equilibrium for an economy occurs when C + I + G + X = $14 trillion. If the real Gross Domestic Product (GDP) is $13 trillion, then unplanned inventories are A. decreasing, and real Gross Domestic Product (GDP) will expand. B. decreasing, and real Gross Domestic Product (GDP) will contract. C. increasing, and real Gross Domestic Product (GDP) will expand. D. increasing, and real Gross Domestic Product (GDP) will contract.
- If in an economy MPC is 0.8 and investment increase by $5 billion. How much there is an increase in income.Use the information in the table to answer the following questions. All numbers are in billions of 2012 dollars. Planned Investment (1) Real GDP (Y) $14,000 $15,000 $16,000 $17,000 $18,000 The equilibrium level of GDP is $ The MPC is billion. Consumption (C) $11,000 $11,750 $12,500 $13,250 $14,000 $1,500 $1,500 $1,500 $1,500 $1,500 (enter your response to two decimal places). Suppose that net exports increase by $400 billion. Using the multiplier formula, determine the new level of GDP. A $400 billion increase in net exports leads to a change in spending of $ billion, so the new level of GDP will be $ billion. Government Purchases (G) $2,500 $2,500 $2,500 $2,500 $2,500 Net Exports (NX) - $500 - $500 - $500 - $500 - $500What will the multiplier be when the MPS is 0, 0.4, 0.6, and 1? What will it be when MPC is 1, 0.90, 0.67, 0.50, and 0? How much of a change in GDP will result if firms increase their level of investment by 8 billion and the MPC is 0.80? If the MPC instead of 0.67?
- Suppose that a certain country has an MPC of .9 and a real GDP of $400 billion. If its investment spending decreases by $4 billion, what will be its new level of real GDP?Question 45 5 pts Potential GDP equals $500 billion. The economy is currently producing GDP equal to $400 billion. If the MPC is 0.52, then autonomous spending must change by $ billion for the economy to move to potential GDP? Please round to two decimal places where needed. Question 46 5 pts Suppose Ford plans to produce 9.2 million trucks this year. The company expects to sell 7.5 million. Suppose that at the end of the year, Ford has sold 7.3 million trucks. What is the level of planned inventories? Please round to the nearest one-decimal and enter as millions. For example, if your answer was 4,500,000 you would enter the number 4.5. Question 47 5 pts An economy sees consumption increase by $2,792 million when disposable income increases by $4,770. Assuming the marginal propensity to consume remains constant, what is the marginal propensity to save? Please round to the closest two decimal places.If you spend $100 and the MPC is 0.9, how much will total GDP rise because of this spending of $100 ? $500 $100 $250 $1,000