Which of the following formulas for the simple income multiplier for autonomous spending is correct? a) 1 / mps b) 1 / (1-mpc) c) change in equilibrium income / change in autonomous spending d) all of the above
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Which of the following formulas for the simple income multiplier for autonomous spending is correct?
a) 1 / mps
b) 1 / (1-mpc)
c) change in equilibrium income / change in autonomous spending
d) all of the above
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- QUESTION 36 40 36 32 28 24 20 16 12 8 4 0 O b) 3/2 c) 2/3 d) 1/3 E,Q E O e) 3 16 24 36. What is the value of the "simple income multiplier" for autonomous spending? a) zero 32 40 o AE SYAS 1548 + 19P - 12Poil YAD = 412 – 33P+ 26G %3D Suppose initially, the Poil = $86 per barrel and government spending is equal to $780. Part (a): Calculate equilibrium GDP and the price level. Part (b): Determine the magnitude of the simple multiplier if oil prices exogenously rise by $1. Part (c): Determine the magnitude of the simple multiplier if government spending exogenously increases by $1.QUESTIONS GO WITH GRAPH 7. Given this diagram, what is the numerical value of the autonomous spending simple multiplier? 8. Given this diagram, if the total autonomous spending were to decrease from 25 to 15, what will b the resulting equilibrium level of income?
- 15. If government's spending increases by 60 and marginal propensity to consume is 0.8, how will the increase in equilibrium income be? 65 b) 300 90 d) 250Which of the following statements is TRUE? A. The spending multiplier is calculated as 1/MPC B. The proportion of any income that is spent rather than saved is called the spending multiplier C. MPC is always equal to MPS D. The value of the spending multiplier will increase if MPC increases. Suppose an economy is represented by the following equations.Consumption function C = 100 + 0.8YdPlanned investment I = 38Government spending G = 75Exports EX = 25Imports IM = 0.05YdAutonomous Taxes T = 40Planned aggregate expenditure AE = C + I + G + (EX - IM)a. By using the above information calculate the equilibrium level of income for thiseconomy. b. Calculate the value of expenditure multiplier. c. Suppose that government spending is increased by 5, what will happen to theequilibrium income level?
- Given the following consumption function, C = 400 + 0.75YD,where C= consumption expenditure, YD = disposable income, Investment= $1200, Government spending = $1600,Exports = $500, Imports = $600, Taxes = $1200 and Potential GDP = $9000Choose corrcct optiona) Aactual output is less than potential outputb) actual output is zeroc) actual output is equal to potential outputd) actual output is higher than potential outputThe Expenditure multiplier occurs because A. a change in autonomous expensitures changes household incomes B) a change in autonomous expensitures causes real GDP to change in the opposite dirrection C) a change in households incomes changes autonomous expensitures D) any change in real GDP must also change the price level E) goverment expenditure on goods and services change by a proportional amount to government taxesDerive the expenditure multiplier using the lump sum taxes (or fixed sum)
