The variable that connect the market of money and the market of goods via investment spending is: a The MPC b The interest rate c The MPS d The CPI
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The variable that connect the market of money and the market of goods via investment spending is: a The MPC b The interest rate c The MPS d The
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- What would be the value of APC if consumption is $2000 and income is $5000What is meant by the rate of interest. How is the rate of interest determined? Explain in 500 words.Which one of the following is NOT a possible relationship between income and spending Select one: a. Income equals the level of spending b. Spending is higher than income c. None is a relationship d. Income is higher than spending
- C = 50 + 0.9 · (Y – T) I = 50 – 1000 -r where Y is real output and r is the real interest rate. Government purchases and taxes are G = 500, T = 500. The money market equilibrium curve-or LM curve-is M Y P 5i where P is the price level and i is the nominal interest rate. The Central Bank (CB) is initially supplying M = 10000 units of money, and expected inflation is aº = 0.05. The long-run aggregate supply (LRAS) is Y, = 1000. Suddenly, there is a climate shock that changes the marginal propensity to consume (MPC), and the consumption function changes to C' = 50 + 0.8 - (Y – T). 1. Explain how the long-run values of (r, i) are determined before the climate shock. 2. Which, if any, of the graphs from Appendix A best depicts the long-run change in the interest rate(s) due to the climate shock? Explain. 3. Explain how the long-run values of (Y, P) are determined before the climate shock.In the circular flow of income and spending:(a) Investment results in a decrease in the volume of the income flow;(b) Savings result in an increase in the volume of the income flow;(c) Taxes result in an increase in the volume of the income flow;(d) Imports result in a decrease in the volume of the income flow. choose oneHow GNI is calculated?