The permanent-income theory of consumption implies that Multiple Choice the short-run multiplier is smaller than the long-run multiplier the short-run multiplier is larger than the long-run multiplier

The marginal propensity to consume is  a)the average amount of income that is consumed or spent b)the ratio of consumption to income c)the ratio of the change in consumption to a change in income d)the ratio of income to consumption

i need 1, 2, 3 parts Solution

3. If the consumption function is C= $200 billion + 0.9Y, a) How much do consumers spend with income of $3 trillion? b) How much do they save?

In each of the following cases, calculate the values of MPC, MPW, and the spending multiplier. Enter your responses below rounded to 2 cecimal places. a. A $6 million increase in income leads to a $900,000 rise in consumption on domestic items. MPC is therefore and the spending multiplier is , MPW is b. A $8 million decrease in income results in a $0.8 million drop in consumption on domestic items. MPC is therefore and the spending multiplier is |. MPW is c. A $4 million decrease in income causes a $3.2 milion drop in withdrawals. MPC is therefore 1. MPW is and the spending multiplier is

Cameron’s income is $1000 and her Consumption expenditure is $700. What is her MPC? Group of answer choices a. 0.7 b. 0.3 c. We do not have enough information to calculate her MPC. d. 700

The simple multiplier is:  a) consumption spending divided by saving.  b) one divided by one minus the marginal propensity to consume.  c) one plus the marginal propensity to consume.  d) one divided by one plus the marginal propensity to consume.  e) the MPC.

3. When the following event occurs, the change in Real GDP = Event: The government increases its education funding by $60 billion; the marginal propensity to consume is 0.6. the multiplier.

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

Consumption and Saving- End of Chapter Problem Which one of the following reasons makes it easier to forecast the impact of an income change on consumption for hand-to-mouth consumers than for consumption smoothers? It is easier because hand-to-mouth consumers only spend their permanent income. hand-to-mouth consumers save a large portion of their income. the marginal propensity to consume is 1 for consumption smoothers. hand-to-mouth consumers spend their entire income as they earn it.