In the economy of Spendsalot, the marginal propensity to save, MPS, is 0.8. What is the marginal propensity to consume, MPC, for Spendsalot?   Which value does MPC determine? a.the slope of tax revenues as a function of GDP b.the slope of pre‑tax consumption as a function of GDP c.the slope of pre‑tax investment as a function of GDP d.the slope of government consumption as a function of GDP.

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A: In an economy, the marginal propensity to save refers to the amount of additional income that is…

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A: MPC is the marginal propensity to consume which is the proportion of income spent on consumption.

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A: ∆ National Saving = ∆ Private Saving + ∆ Public Saving∆ Private Saving = ∆ Disposable Income - ∆…

Q: The partial data in the table below are for the economy of Arinaka. Planned investment, government…

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Q: U 1 2 point Suppose a country's MPC is 0.75. If the government increases taxes, causing disposable…

A: Marginal propensity to consume shows how consumption changes as income changes.

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Q: suppoose  the MPC is 0.9 aand  the MPI is  0.1.If government expenditure go up $100 billion while…

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Q: Using taxes as a function of income, derive and explain the investment multiplier

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Q: What is the relationship between MPS and multiplie

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Q: 40. If the expendture multiplier in a closed economy without govemment activites equais 4 what is…

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Q: You are told that taxes in this economy are equal to 100. What is the value of autonomous…

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Q: partial data in the table below are for the economy of Arinaka. Planned investment, government…

A: MPC  is marginal propensity to consume,which tells how much of additional income is used on…

Q: Calculate MPS and it's given that MPC is 0.88

A: # Marginal propensity to save plus marginal propensity to consume always be equal to 1

Q: crowding out

A: Crowding out is a situation when increased interest rate leads to reduction in private investment…

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A: In equilibrium, Y = C + I + G + X - M Saving (S) = Y - C Multiplier = 1 / (1 - MPC) Increase in Y =…

Q: aggregate planned expenditure

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Q: Assume the MPS is 0.25. Assuming only the multiplier effect matters, a decrease in government…

A: MPS=1-MPC Change in GDP=∆Y=11-MPC×∆government purchases=1MPS×∆government purchases In this…