The collective market capitalization of stock in American companies increased from $34 trillion at the end of 2019 to $41 trillion at the end of 2020. Not all of the stock is owned by American consumers but for this problem pretend that it is. If the marginal propensity to consume stock wealth is 0.01 then how much would we expect consumption spending to increase due to the increase in the stock wealth? $ billion

At an aggregate output level of $400 billion what is aggregate savings?

Consider two economies, A and B. Economy A has a marginal propensity to consume of 0.9, a net tax rate of 0.2 and a marginal propensity to import of 0.2. Economy B has a marginal propensity to consume of 0.7, a net tax rate of 0.2 and a marginal propensity to import of 0.2. Suppose there is an increase in autonomous investment of $5 billion in each of these economies. Which of the following statements is true? Select one: O A. The AD curve shifts farther to the right in Economy A than Economy B. O B. The AD curve shifts to the left the same amount in both economies. O C. The simple multiplier is larger in Economy A. O D. The AD curve shifts to the right the same amount in both economies. O E. The AD curve shifts farther to the left in Economy B than Economy A.

Consider an economy described as follows: Y = C+1+G Y= 8,000. G= 2,500. T 2,000. C- 1,000 + 2/3(Y-T). 1-1,200-100r. 'n this economy, compute private saving, public saving, and national saving. How much is the marginal propensity to consume? 1. 2. 3. Find the equilibrium interest rate.

Investment can be increased both by reducing taxes on private saving and by reducing the government budget deficit. True or False: It is possible to implement both of these policies at the same time because reducing taxes on private spending has the effect of decreasing the government budget deficit. True False What would you need to know in order to judge which of these two policies would be a more effective way to raise investment? Check all that apply. The responsiveness of private saving to increases in investment The response of private saving to changes in the government budget deficit The elasticity of private saving with respect to the after-tax real interest rate

If, Autonomous Private Final Consumption Expenditure = $ 13,500, Exports = $ 5000 Government Final Consumption Expenditure = $ 6800 Government Investment Expenditure = $ 8900 Marginal Propensity to Import = 0.1, Marginal Propensity to Save = 0.25, Tax rate = 20% If Government increases its Investment Expenditure by $ 12,000, what is Marginal Propensity to Consume?

Suppose government provides tax rebate to small business on their business-related expenditure. Assuming no change in government budgetary position, this policy is likely to have a positive effect on household (or private) saving in the economy (Hint: think about the effect of this policy in Loanable Funds Market) Is this statement true, false or uncertain? Please provide your explaination.

Consider an economy in which taxes, planned investment, government spending on goods and services, and net exports are autonomous, but consumption and planned investment change as the interest rate changes. You are given the following information concerning autonomous consumption, the marginal propensity to consume, planned investment, government purchases of goods and services, and net exports: Ca = 1,500 – 20r, c = 0.6; I= 2,450 – 60r; G= 1,980; NX =- 200; T = 1,750. a. Compute the value of the marginal propensity to save. b. Compute the amounts of autonomous planned spending, Ap, when the interest rate equals 0, 2, 4, and 6. c. Compute the equilibrium levels of income when the interest rate equals 0, 2, 4, and 6. Graph the IS curve. d. Suppose that policymakers decide to reduce the number of troops in Afghanistan, which results in a reduction of government spending of $80 billion. Compute the new amounts of autonomous spending, Ap, when the interest rate equals 0, 2, 4, and 6. e.…

Suppose the marginal propensity to consume equals 0.8 (i.e., c1 = 0.8). Given this information, which of the following events will cause the largest increase in output? Select one or more:   a. Public spending, G, increases by 200   b. real GDP was larger than nominal GDP from 2002 to 2008 Public spending, G, increases by 150   c. Investment, I, increases by 150   d. Taxes, T, decrease by 200

Even during a financial recession, consumers tend to increase spending in _______