In a simple, private economy, suppose that the MPC is 0.8 and investment rises by $20 million.At the new equilibrium, how much will saving have increased? A)$8 million B)$16 million C)$20 million D)$80 million E)$100 million
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- The following table shows data for the economy before the decrease in saving. Suppose that the decrease in saving causes consumption to rise from $280 million to $320 million. Assume Say's law holds in this economy. Fill in the data for the economy after the decrease in saving. Before Saving Decrease After Saving Decrease Consumption (C) $280 million $320 million Investment (I) $200 million $ million Government Purchases (G) $250 million $ million Exports (EX) $500 million $500 million Imports (IM) $300 million $300 million As a result of the decrease in saving, total expenditures will .4.3 The following questions refer to this table: Aggregate Output/Income Planned Investment Consumption 1,000 1,500 1,500 1,875 2,250 250 250 2,000 2,500 3,000 250 2,625 3,000 250 250 3,500 3,375 250 4,000 4,500 3,750 4,125 250 250 a. At each level of output, calculate saving. At each level of output, calculate unplanned investment (inventory change). What is likely to happen to aggregate output if the economy produces at each of the levels indicated? What is the equilibrium level of output? b. Over each range of income (1,000 to 1,500, 1,500 to 2,000, and so on), calculate the marginal propensity to consume. Calculate the marginal propensity to save. What is the multiplier? c. By assuming there is no change in the level of the MPC and the MPS and planned investment jumps by 125 and is sustained at that higher level, recompute the table. What is the new equilibrium level of Y? Is this consistent with what you compute using the multiplier?3. Consider the economy described by the following equations Y=C+I+G Y = 8,000 G = 2,000 T = 1,000 C=250 +0.75(Y-T) I = 800 - 50r a) In this economy, compute private saving, public saving and total (national) saving. b) Find the equilibrium interest rate. c) Now suppose that G decreases to 1,500. Compute private saving, public saving and total saving.
- 1.12 Study the following diagram and answer the question that follows. Expenditures (billions of dollars per year) 3.500 3000 DOO 2500 2000 1500 1000 500 Figure 9.1 45% At an income level of $2,000 billion, a) Consumption equals $1,500 billion. b) Saving equals $0. c) The MPC equals 0.80. d) There is dissaving. o 500 1000 1500 2000 2500 3000 3500 Income (billions of dollars per year) C Ac(Advanced analysis) Assume the saving schedule for a private closed economy is S= -20 + 0.2Y, where Sis saving and Yis gross domestic product. The multiplier for this economy is Multiple Choice 4. 5. 3. 10.21. Which of the following equations is correct? A Saving = Disposable income + Consumption B- Saving = Disposable income x Consumption C- Disposable income = Consumption - Saving D- Saving = Disposable income - Consumption
- 1.12 Study the following diagram and answer the question that follows. Expenditures (billions of dollars per year) > > 3500 3000 2500 2000 1500 1000 500 Figure 9.1 500 1000 1500 2000 2500 3000 3500 Income (billions of dollars per yazari At an income level of $2,000 billion, a) Consumption equals $1,500 billion. b) Saving equals $0. c) The MPC equals 0.80. d) There is dissaving. F 뉴 C connex1.12 Study the following diagram and answer the question that follows. Expenditures (billions of dollars per year) 3500 3000 2500 2000 1500 1000 500 Figure 9.1 45 500 1000 1500 2000 2500 3000 3500 Income (billions of dollars per year) At an income level of $2,000 billion, a) Consumption equals $1,500 billion. b) Saving equals $0. c) The MPC equals 0.80. d) There is dissaving.Given Table 12-6 below, fill in the values for saving. Assume taxes = $800. Table 12-6 National Income $11,400 11,800 12,200 12,600 Consumption $7,500 7,800 8,100 8,400 Use the editor to format your answer Saving
- Question 16 (Billions of Dollars) Yd $200 200 350 400 500 Which of the following represents the consumption function consistent with the data in the above table? 150 + 0.8Yd 200 + 0.75Yd 150 + 0.25Yd 200 + 0.2YdChapter 10 3.Draw a graph representing a hypothetical economy. Carefully label the two axes, the S + T + IM curve, the I + G + EX curve, and the equilibrium level of the real GDP. Illustrate the effect of an increase in the level of autonomous saving. Y C I G X $ 100 $ 120 $ 20 $ 30 $ 10 $ 300 $ 300 $ 20 $ 30 - $ 10 $ 500 $ 480 $ 20 $ 30 - $ 30 $ 700 $ 660 $ 20 $ 30 - $ 50 8.What is the MPC? 9.What is the MPI? 10.What is the MPS? 11.What is the multiplier? 12.What is the equilibrium level of the real GDP? 13.What is the value of…If consumption expenditures are $1800 million, gross investment is $450 million, imports are $350 million, exports are $180 million, government expenditure on goods and services is $120 million, and government transfer payments are $180 million and net taxes are $250 million; a) Calculate the GDP. b) Is there budget deficit or surplus? Calculate. c) How much is the private (household) saving?