Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
expand_more
expand_more
format_list_bulleted
Question
Chapter 28, Problem 20APA
To determine
Identify the autonomous expenditure and marginal propensity to consume (MPC).
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The consumption expenditure and output of the country is 500 billion and 100 billion respectively. Calculate the average propensity to consume.
Disposable
Consumption
income
expenditure
(€, thousands)
(€, thousands)
200
220
300
300
400
380
500
460
According to the data in the above table, calculate the marginal propensity to consume (MPC).
Give only a numerical answer.
Where needed, use only a point (.) for decimals (e.g., 3.25, not 3,25) and no thousands separator (e.g., 2000, not 2,000).
Draw expenditure graph with information below
C=360+0.6Y
I=200million
G=150million
Chapter 28 Solutions
Macroeconomics
Ch. 28.1 - Prob. 1RQCh. 28.1 - Prob. 2RQCh. 28.1 - Prob. 3RQCh. 28.2 - Prob. 1RQCh. 28.2 - Prob. 2RQCh. 28.2 - Prob. 3RQCh. 28.2 - Prob. 4RQCh. 28.3 - Prob. 1RQCh. 28.3 - Prob. 2RQCh. 28.3 - Prob. 3RQ
Ch. 28.4 - Prob. 1RQCh. 28.4 - Prob. 2RQCh. 28.4 - Prob. 3RQCh. 28.4 - Prob. 4RQCh. 28 - Prob. 1SPACh. 28 - Prob. 2SPACh. 28 - Prob. 3SPACh. 28 - Prob. 4SPACh. 28 - Prob. 5SPACh. 28 - Prob. 6SPACh. 28 - Prob. 7SPACh. 28 - Prob. 8SPACh. 28 - Prob. 9SPACh. 28 - Prob. 10SPACh. 28 - Prob. 11SPACh. 28 - Prob. 12SPACh. 28 - Prob. 13SPACh. 28 - Prob. 14SPACh. 28 - Prob. 15APACh. 28 - Prob. 16APACh. 28 - Prob. 17APACh. 28 - Prob. 18APACh. 28 - Prob. 19APACh. 28 - Prob. 20APACh. 28 - Prob. 21APACh. 28 - Prob. 22APACh. 28 - Prob. 23APACh. 28 - Prob. 24APACh. 28 - Prob. 25APACh. 28 - Prob. 26APACh. 28 - Prob. 27APACh. 28 - Prob. 28APACh. 28 - Prob. 29APACh. 28 - Prob. 30APACh. 28 - Prob. 31APACh. 28 - Prob. 32APACh. 28 - Prob. 33APACh. 28 - Prob. 34APA
Knowledge Booster
Similar questions
- If consumption expenditure is $3100 and savings is $1800 Calculate incomearrow_forwardCOMPUTE FOR MP AND AP. EXPLAIN.arrow_forwardPotential GDP| ' 45° C+1+(X-IM) 4,800 B 3,200 3,000 4,000 5,000 2. Use the graph above to answer the following questions: a. Calculate the MPC: b. What is the equilibrium value of GDP?_ Real Expenditure (billions of dollars per year)arrow_forward
- In the below table, C is consumption expenditure, Iis investment, G is government expenditure, and NX is the net exports. All entries are in million dollars. (SHOW THE STEPS OF CALCULATIONS) a) What is the equilibrium level of real GDP? b) What is the slope of the aggregate expenditure function? c) What is the unplanned inventory change when GDP is equal to $2200 million? d) How much is the level of savings when income is $2300 million?arrow_forwardTable 2 shows elements in the national income accounts of an economy. Assume the economy is currently in equilibrium. elements billions Consumption (total) 80 Investment 9 Government Expenditure. 6 Imports 15 Exports 8 C) If national income now rises by £22 billion and as a result, the consumption of domestically produced goods rises to £80 billion. Calculate the marginal propensity to consume (MPC). D) What is the value of the multiplier? E) Comment on the results in part (c) and (d).arrow_forwardThe spreadsheet gives real GDP (Y) and its components in billions of dollars. Calculate equilibrium expenditure. Equilibrium expenditure is $ billion. ABCDE 1 YC 234567 A 100 140 80 20 40 30 B 200 220 80 с 300 300 80 D 400 | | 380 80 20 E 500 460 80 F 600 540 80 20 EC222222 F GXM G 20 40 60 20 40 90 40 120 20 40 150 40 180arrow_forward
- a) About Country A, what is your estimate of the country's marginal propensity to consume (MPC) based on the following information on its GDP (Y) and the components thereof (in billion dollars) for two past years? Show calculation. Year 1 Year 2 c) GDP C I 11200 8000 2200 12000 8500 2400 G 800 880 The next few parts are about Country B, whose government plans to cut taxes by $24 billion as a measure to fight the current recession. The marginal propensity to consume (MPC) in Country B is known to be 34. There will be no crowding-out effect. e) NX 200 220 b) What is the initial effect (in billion dollars) of the tax cut on Country B's aggregate demand? (The "initial effect" here refers to the effect on AD after only the first round of increased spending.) What is the total effect of the tax cut on aggregate demand? Explain why it is different from the initial effect. d) How does the total effect of this $24 billion tax cut compare to the total effect of a $24 billion increase in…arrow_forwardSuppose 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.arrow_forwardConsumption ($) Disposable Income ($) 1,200 3,200 2,100 4,000 3,000 4,800 Calculate the Marginal Propensity to Consume (MPC). Group of answer choices 1.125 0.6 0.3 0.9arrow_forward
- n the below table, C is consumption expenditure, Iis investment, G is government expenditure, and NX is the net exports. All entries are in million dollars. (SHOW THE STEPS OF CALCULATIONS) a) What is the equilibrium level of real GDP? b) What is the slope of the aggregate expenditure function? c) What is the unplanned inventory change when GDP is equal to $2200 million?arrow_forwardCalculate consumption expenditure given that:- APC = 0.16 Income = $5000arrow_forwardThe change in consumer spending is 160 and the change in disposable income is 200. Calculate the value of MPCarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
