3. Suppose that investment as a fraction of output in the United States rises permanently from 0.15 to 0.18. Assume that capital's share is (a) By about how much does output eventually rise relative to what it would have been without the rise in investment? (b) By about how much does consumption rise relative to what it would have been without the rise in investment? (c) What is the immediate effect of the rise in investment on consumption? About how long does it take for consumption to return to

3. Suppose that investment as a fraction of output in the United States rises permanently from 0.15 to 0.18. Assume that capital's share is (a) By about how much does output eventually rise relative to what it would have been without the rise in investment? (b) By about how much does consumption rise relative to what it would have been without the rise in investment? (c) What is the immediate effect of the rise in investment on consumption? About how long does it take for consumption to return to

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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.Refer to the information provided in Figure 8.9 below to answer the questions that follow AE 225 200 175 150 45 100 200 300 Aggregate output ($ millions) Figure 8.9 Refer to Figure 8.9. How will equilibrium aggregate expenditure and equilibrium aggregate output change as a result ?of a decrease in investment by $20 million AE line shifts down, increasing equilibrium output and equilibrium expenditure a O AE line shifts up, increasing equilibrium output and equilibrium expenditure b O AE line shifts down, decreasing equilibrium output and equilibrium expenditure .c O AE line shifts down, increasing equilibrium output and decreasing equilibrium expenditure .d O Aggregate expenditures ($ millions)
(11) The slope of the consumption function is the __________________________ __________________________ __________________________.
2. What would be the impact of changing the determinant variables given in the first column (below) on investment? Factors affecting Investment Effect on Investment decrease in interest rate Increase in interest rate Increase in prices of capital goods There is no technology available in the country Demand for consumer goods decrease Government decided to increase corporation tax Increase in Subsidies
If Michelle's income is reduced to zero after she loses her job, her consumption will be and her saving will be O greater than zero; greater than zero O less than zero; greater than zero O greater than zero; less than zero O less than zero; less than zero
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Economics
10:35 PM A O 60 Aggregate Expenditures Schedule 50 Tools 40 C+1 Equilibrium 30 20 10 10 20 30 40 50 Real GDP (billions of dollars) Instructions: In part b, enter your answer as a whole number. In part c, round your answer to 1 decimal place. b. What is the equilibrium GDP for this country? billion c. What is the marginal propensity to consume for this country? Aggregate expenditures (billions of dollars)
Question: How can there be "Autonomous Spending" even when a person has zero income? O a) All of the above are correct. b) People need to consume at least a minimum to stay alive. UO People need a certain level of consumption even if they do not have income. O d) People spend money from their savings, borrowing or from unemployment or pension pay.
Suppose two successive levels of disposable personal income are $13.8 and $18.8 billion, respectively, and the change in consumption spending between these two levels of disposable personal income is $3.65 billion, then the MPS will be equal to O 0.25 O 0.27 O 0.35 O 0.65 O 0.73
12.
Often, Americans are surprised to learn that _______ of the value of U.S. consumption comes from other countries. A) about 30 percent B) about 35 percent C) about 15 percent D) about 25 percent E) about 20 percent
23. In an economy income increases by 10,000 as a result of a rise in investment expenditure by 1,000. Calculate: (a) Investment Multiplier (b) Marginal Propensity to Consume