Given the information below, answer the questions that follow. C = $40 + 0.75Y             I = $30             G = $40               X – M = $10   a) What is the equilibrium GDP?  Explain why $550 is not the equilibrium. b) What is the marginal propensity to consume (MPC) in this question? (Explain) c) What is the multiplier in this question and explain the significance of the multiplier?

Suppose that an economy consists of only two individuals. Trevor has $1150 available to spend on goods. He decides to purchase $210 worth of produce from Juanita in the current quarter. No other economic activity takes place during the current quarter. Using this information, answer the questions. For the current quarter, what is the economy's income? $ For the current quarter, what is the economy's expenditure? In an economy, how are income and expenditure related? Income is greater than expenditure. O Income is less than expenditure. They are unrelated. O They are equal.

TOPIC: Deriving and exploring the total expenditures curve

1.12 Study the following diagram and answer the question that follows. Expenditures (billions of dollars per year) > > 3500 3000 2500 2000 1500 1000 500 Figure 9.1 500 1000 1500 2000 2500 3000 3500 Income (billions of dollars per yazari At an income level of $2,000 billion, a) Consumption equals $1,500 billion. b) Saving equals $0. c) The MPC equals 0.80. d) There is dissaving. F 뉴 C connex

7. Question 3. The consumption function Consider the hypothetical country of Kejimkujik. Suppose that national income in Kejimkujik is $12 billion, households pay $4 billion in taxes, household consumption is equal to $6 billion, and the marginal propensity to consume (MPC) is 0.625. On the following graph, use the blue line (circle symbol) to plot the economy's consumption function. CONSUMPTION (Billions of dollars) 20 18 16 14 12 10 8 OF 6 4 2 0 6 8 10 12 14 16 DISPOSABLE INCOME (Billions of dollars). 18 20 Consumption Function

THE AGGREGATE EXPENDITURE MODEL (IN THE SHORT RUN)YOU MUST SHOW YOUR CALCULATIONS IN THE SPACE BELOWFOR THE NEXT PROBLEM USE THE FOLLOWING FORMULA:CHANGE IN GDP = [ 1 / (1-MPC) ] * CHANGE IN GInitially, the economy is producing $13 trillion in goods and services and the government is spending $2 trillion.Then the government decides to increase its spending to $2.7 trillion. What is the value of the spending multiplier?

Question 3 of 16 Income and consumption changes for five people are shown in the table. Given this information, rank the marginal propensities to consume (MPC) for the five people from largest to smallest. Largest MPC   Smallest MPC   Answer Bank Bert Doug Eli Carter Al     Name Income change Consumption change Al +$5,000+$5,000 +$3,000+$3,000 Bert +$2,500+$2,500 +$800+$800 Carter +$1,000+$1,000 +$800+$800 Doug −$2,500−$2,500 −$1,750−$1,750 Eli −$5,000−$5,000 −$2,000−$2,000

37. If the equilibrium level of GDP is $30,000, using the equations for C, I, G, and NX shown above, find the value of the marginal propensity to consume. C=4,000+ 0.5Y I= 1,500 G=2,250 NX=-150

Macmillan Learning (Table: Consumption and Savings) Based on the table, the marginal propensity to consume is propensity to consume Income Consumption Spending Saving $30,000 $30,000 $0 40,000 35,000 5,000 50,000 40,000 10,000 0.5; varies with the level of income $5,000; is $5,000 $10,000; is $35,000 2; varies with the level of income and the average

The following table shows the real output demanded and supplied at various price levels in a hypothetical economy. Real Output Demanded (Billions of dollars) 20 40 60 100 160 Price Level (Index number) 160 120 80 40 20 Real Output Supplied (Billions of dollars) (Billions of dollars) 170 160 140 100 Note: Line segments will automatically connect the points. 40 On the following graph, use the blue points (circle symbols) to plot the aggregate demand (Initial AD) curve for the economy. Then use the orange points (square symbols) to plot the short-run aggregate supply (SRAS) curve for the economy.