In the short-run macro model, if the MPC equals 0.9 and investment spending rises by P200 billion, then equilibrium GDP will rise by a. P20 billion b. P180 billion c. P90 billion d. P1,000 billion e. P2,000 billion
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- 1. Country X has following data: C = 20 + 0.8Y4, I = 30, G = 40, Tx = 20, T, = 15, X = 60, M = 20 + 0.04Y, incoming year growth target is 600, All figures is billion. Please calculate: a. National income equilibrium! b. Consumption and saving equilibrium! c. Government income from tax! d. How much change in government consumption if they want to achieve growth target?Macroeconomics question: In an economy, the government wants to increase aggregate demand by $50 billion at each price level to increase real GDP and reduce unemployment. If the MPS is 0.4, then it could increase government spending by: A. $20 billionB. $10 billionC. $40.50 billionD. $31.25 billionIf the MPS rises, then the MPC will: a. Fall b. Rise c. Stay the same In what direction will each of the following occurrences shift the consumption and saving schedules, other things equal? a. A large decrease in real estate values, including private homes. b. A sharp, sustained increase in stock prices. c. A 5-year increase in the minimum age for collecting Social Security benefits. d. An economywide expectation that a recession is over and that a robust expansion will occur. e. A substantial increase in household borrowing to finance auto purchases. Irving owns a chain of movie theaters. He is considering whether he should build a new theather downtown. The expected rate of return is 15 percent per year. He can borrow money at a 12 percent interest rate to finance the project. Should Irving proceed with this project? Which of the following scenarios will shift the investment demand curve right? (Select one or more answers) a. Business taxes increase b. The expected return…
- 3. Given the following information, S = -200 + 0.3Y I= 100 a. Calculate the national income equilibrium by using the Leakage-Injection approach. b. Calculate the value of saving. c. Draw the aggregate expenditure graph.1. Define marginal propensity to consume. Explain its relationship with marginal propensity to save. 2. Distinguish between MPC and APC. 3. Estimate the marginal propensity to consume in an economy in which the aggregate consumption expenditure from k400 000 to 500 000. 4.define the multiplier. Apart from income generation via the multiplier process, what other important role does investment play in an underdeveloped economy? Define inflation. With the help of diagrams bring out the distinction between cost push and demand pull inflation. Are the economic effects of inflation identical for all sections of society. Discuss giving comprehensive examples. Using the IS- LM model, discuss how equilibrium is attained in the money and products market distinctively, to arrive at the general level of equilibruim in an economy. What happens to interest rates as prices change along a given AD schedule? Explain using the IS - LM model. Explain the fixed and flexible exchange rates. What is the…n 30 0 out If disposable income is 85 per cent of national income, the marginal propensity to consume (out of disposable income) is 0.7, and imports are 22 per cent of national income, then the marginal propensity to spend on national output is: . a. 0.375 b. 0.595 c. 0.850 d. 0.220
- 3. Given the following information, S= -200 + 0.3Y I= 100 a. Calculate the national income equilibrium by using the Leakage-Injection approach. b. Calculate the value of saving. c. Draw the aggregate expenditure graph. РОСО SHOT ON POCO F2 PRO2. In macroeconomic theory, total or aggregate spending is denoted by A and total or aggregateproduction of income by Y. Which one of the following statements is incorrect? A When A is greater than Y, there is disequilibrium and Y will tend to increase.B When A is equal to Y, there is equilibrium and Y will remain unchanged.C When A is less than Y, there is disequilibrium and Y will decrease.D When A is greater than Y, there is disequilibrium and A will decrease.Question:Given that the marginal propensity to consume in a fully employed closed economy is 0.75, an increase in government expenditure of $1,000 million will increase the national income by:a. $0b. $750c. $4,000d. $7,500e. $8,000
- 1. The mpc and mps measures charges in consumption expenditure and savings that result from changes in ? 2. The sum of the components of aggregate expenditure that are not influenced by real GDP is called?4. The country of Merryville has an unemployment rate that is greater than the natural rate of unemployment.The government of Merryville increases spending on goods and services by $200 billion, which is financed by borrowing. If the marginal propensity to consume in Merryville is 0.75:i. Calculate the multiplierii. What is the maximum possible change in real gross domestic product (GDP) that could result from the $200 billion increase in government spending?Initital $10 increase in investment expands GDP by $10 in first round of multiplier process. the 2nd round both GDP and Consumption rise $6. 1. what is the Marginal Propensity to Consume? 2. What is the size of the mulitplyer?