Diddy spends $1,500 on a new laptop to use in his business in San Francisco. The laptop was built in Canada. Investment spending and net exports both increase by $1500, GDP increases by $3000 Consumption spending increases by $1500, net exports decreases by $1500 O Consumption spending and net exports both increase by $1500, GDP increases by $3000 O Investment spending and GDP both increase by $1500 O Investment spending increases by $1500, net exports decreases by $1500 Consumption spending and GDP both increase by $1500 Investment spending and net exports both increase by $1500

Diddy spends $1,500 on a new laptop to use in his business in San Francisco. The laptop was built in Canada. Investment spending and net exports both increase by $1500, GDP increases by $3000 Consumption spending increases by $1500, net exports decreases by $1500 O Consumption spending and net exports both increase by $1500, GDP increases by $3000 O Investment spending and GDP both increase by $1500 O Investment spending increases by $1500, net exports decreases by $1500 Consumption spending and GDP both increase by $1500 Investment spending and net exports both increase by $1500

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Explain how does adecrease in the current income y affect the consumer’s consumption-saving decision. In particular,explain: 1) How will current consumption c, future consumption c′, and savings s change; 2) Arethere any substitution effect or income effect. Make sure you draw two figures, one for the borrowersand one for the lenders
If your planned consumption expenditure is $600 per month and your income is $500 per month, your O a. savings is increasing by $100 per month. O b. induced consumption is $600. O c. savings is decreasing by $100 per month. O d. autonomous consumption must be zero per month. O e. autonomous consumption is -$100 per month.
According to the text, a "multiplier" is used as an assessment and evaluation tool for several reasons. Which of the following is NOT a reason for using a multiplier? Seleet one: O 1. A multiplier represents the amount of times one dollar will be spent before it leaks out into the cconomy. O 2. A multiplier is used to assess overall return on investment for one dollar spent. 3. A multiplier is used to discount a future expenditure in terms of current dollars that needs to he spent. O 4. A multiplier is used to evaluute the effectiveness of one event or property compured to another.
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Problem 3 Given the below data Disposable Income Consumption expenditure (dollars) 0. 100 100 180 200 260 300 340 400 420 500 500
Which of the following changes in personal income tax would lead to the smallest increase in consumption? O a. O b. a $15 000 decrease in taxes, if MPC equals 0.6 O c. a $30 000 decrease in taxes, if MPC equals 0.25 Oe. a $20 000 decrease in taxes, if MPC equals 0.5 O d. a $12 000 decrease in taxes, if MPC equals 0.75 a $10 000 decrease in taxes, if MPC equals 0.2
Question 1 The Consumer Price Index (CPI) is designed to reflect O only prices faced by consumers in their purchases with discretionary income O only prices faced by consumers for essential goods and services O only prices faced by consumers for personal entertainment O all prices faced by consumers Question 2 The Personal Consumption Expenditures Price Index (PCEPI) is design to reflect Oonly prices faced by consumers in their purchases with discretionary income Oonly prices faced by consumers for essential goods and services Oonly prices faced by consumers for personal entertainment. all prices faced by consumers TI Att 9
2. If disposable income is 4130, consumption is 2400, government spending is 431, and total taxes are 911, national saving is then equal to O 3650 O 3219 O 2210 O 819
Because of scarcity, people are more likely to do what? squander resources increase the profit margin use resources wisely The MOST important factor affecting consumer spending is O the level of current consumer debt O the amount of assets held by consumers such as homes, cars, stocks, or bonds the expectations of consumers of what the economy will be in the future © the level of current consumer income
If Y (the output level) = $1,200, consumption = $800, and government purchases! = $300, how much is saving and investment at equilibrium in a closed economy? Select one: O a. saving $0, investment = $0 O b. saving = $100, investment = $100 O c. saving = $200, investment = $100 Od. saving = $100, investment = $200
Suppose that Amazon decides to spend $10 million on a new distribution center. If the marginal propensity to consume is .8. then how much will GDP go up by once the multiplier process has played out? O $10 million O $20 million O $40 milion O $50 million