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- Investment increases by $200 million and the value of MPC is 0.75. What would be the total increase in spending?The MPC is Group of answer choices the change in consumption divided by the change in income. consumption divided by income. the change in saving divided by the change in income. the change in consumption divided by the change in saving.Calculate change in consumption when change in income is $300 and the MPC is 0.42
- Which of the following is true: a) at equilibrium aggregate expenditure is greater than gross domestic expenditure. b) at equilibrium GDP is greater than gross domestic expenditure. c) at equilibrium aggregate expenditure is smaller than gross domestic expenditure. d) at equilibrium GDP is smaller than gross domestic expenditure or e) at equilibrium both aggregate expenditure and GDP are smaller than gross domestic expenditureIf PAE is greater than Y, we expect: Multiple Choice there will be no change in inventories. the government will spend more than it has collected in taxes. inventories to decrease. inventories to increase. When PAE decreases an economy will move towards: Multiple Choice higher levels of equilibrium aggregate expenditure. lower levels of equilibrium GDP. constant levels of GDP. higher levels of equilibrium GDP Ans bothWhat can we predict about the effect on consumption of an increase in government spending? A) Consumption will increase by an amount equal to the MPC times the change in real GDP. B) Consumption will increase by an amount equal to the MPC times the change in government spending. C) Consumption will increase by the amount of the government spending. D) Consumption will not rise as government spending rise
- If MPC is 0.12 and the change in income is $3300 Calculate change in consumptionIn a closed economy, consumers spend $300 regardless of the level of income, and the marginal propensity to consume (MPC) is 0.75. Investment is equal to $200. The government spends $400 and collects $50 in taxes. The equilibrium level of GDP in this economy is $The autonomous consumption expenditures and autonomous investment expenditures in an economy are $600 and $350, respectively. It is also observed that individuals spend 70% of their additional income on consumption. Write down the consumption function for this economy using the information provided above. (Round your response for the intercept term to the nearest whole number and for the slope term to one decimal place.) C . +..Y Write down the aggregate expenditure function for this economy using the information provided above. (Round your response for the intercept term to the nearest whole number and for the slope term to one decimal place.) AE =..+..Y •.. The equilibrium income that would set the actual national income to the desired aggregate expenditure is $. (Round your response to the nearest dollar.) If the actual national income were $1,584 in this economy, then the inventories of the firms would be failing or rising and firms would reduce or increase their output.
- Calculate MPC when a change in investment spending of 40 million leads to an increase in real GDP by 160 million.If in an economy MPC is 0.8 and investment increase by $5 billion. How much there is an increase in income.How is it possible for consumption expenditure to be positive even when disposable income is zero?