11. If investment declines by 50 and marginal propensity to consume is 0.2, what will happen to equilibrium income? a. decline by 62.5 b. increase by 62.5 c. increase by 250 d. decline by 10
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- QUESTION 21 What is the marginal propensity to consume? a. The ratio of the change in consumption to the change in national income O b. The proportion of national income that goes on consumption O c. The additional spending by a consumer when the price of a good falls O d. The additional revenue received by a firm when it attracts a new customerGiven that the marginal propensity to cinsume is 0.8 and that the initial change in investment expenditure equals $100 million. (a). Calculate and explain the numeric value of the autonomous investment multiplier? (b). Calculate the resultant change in equilibrium national income?Explain two effect of public expenditure on the investment??
- Assume in country Y, the average marginal propensity to save is 0.2. When the aggregateincome is zero, consumers spend 50 to consume. Derive the saving function and consumptionfunction for this country. What happens to consumption when the propensity to savedecreases to 0.1? Explain your answer and show this on the graph.The table below provides Income and consumption Data in billions of dollars. Answer questions 21-24 based on it.Disposable Consumption SavingsIncome100 80 --------200 150 ---------What is the marginal propensity to save for this economy? a. 0.75 b. 0.50 c. 0.3 d. cannot be determinedConsider this economy: C = 100 + 0.5Y |= 400 + 0.1Y Drag and drop options on the right-hand side and submit. For keyboard navigation... SHOW MORE V Marginal propensity to consume 1000 Multiplier 0.5 Income of equilibrium 500 Consumption of equilibrium 1250 Investment of equilibrium 2.5 600 525 725 II II II II II II II II II
- The partial data in the table below are for the economy of Arinaka. Planned investment, government spending, and all taxes are autonomous. You may assume that the MPC, MPS, and MPM are constant. a Fill in the blanks intable below YD Unlanned Investent AE $600 $80 $480 $40 $80 370 $30 650 45 700 750 b. The value of equilibrium income is $ C. If planned investment decreases by $20, the new value of equilibrium income is $Allie has a marginal propensity to consume of 0.75. What does this mean? a. He's spending more than he's making in income b. 75 cents of every additional dollar of his income is saved. c. 75 cents of every additional dollar of his income is spent on consumption. d. 25 cents of every additional dollar of his income is spent on consumption.30. Given this model, what would be the change in equilibrium level of income were G to increase to 250? 31. Given this model, what would be the new equi8librium level of income were Investment spending to decline by 50?
- Marginal propensity to save is 0.2. if the investment increase by 2 billion dollars then the income would invincre by?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) 25025 1 Calculate the equilibrium level of investment if you have the following equations: C=0.4Yd+20, national income is 1000, government expenditures is 200, tax is 50 Investment =300 O Investment-D350 O Investment3D400 O Investment3D450 O None of the above O
