MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 8, Problem 10SQ
To determine
The relationship between MPC and MPS.
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Students have asked these similar questions
17. If the MPC were equal to zero, the expenditure multiplier would be *
a. Less than zero
b. zero
c. between zero and one
d. one
e. greater than one
In a certain economy, when income is $200, consumer spending is $145. The value of the multiplier for this economy is 6.25. It follows that, when income is $230, consumer spending is
$151.25.
$166.75.
$170.20.
$175.00.
The multiplier process can occur when a decrease in investment spending… a) Increases household saving, causing consumers to buy more goods and services.b) Reduces household incomes, causing consumers to buy fewer goods and services.c) Increases household incomes, causing consumers to buy fewer goods and services.d) Reduces household incomes, causing consumers to buy more goods and services
Chapter 8 Solutions
MACROECONOMICS FOR TODAY
Ch. 8.4 - Prob. 1YTECh. 8 - Prob. 1SQPCh. 8 - Prob. 2SQPCh. 8 - Prob. 3SQPCh. 8 - Prob. 4SQPCh. 8 - Prob. 5SQPCh. 8 - Prob. 6SQPCh. 8 - Prob. 7SQPCh. 8 - Prob. 8SQPCh. 8 - Prob. 9SQP
Ch. 8 - Prob. 1SQCh. 8 - Prob. 2SQCh. 8 - Prob. 3SQCh. 8 - Prob. 4SQCh. 8 - Prob. 5SQCh. 8 - Prob. 6SQCh. 8 - Prob. 7SQCh. 8 - Prob. 8SQCh. 8 - Prob. 9SQCh. 8 - Prob. 10SQCh. 8 - Prob. 11SQCh. 8 - Prob. 12SQCh. 8 - Prob. 13SQCh. 8 - Prob. 14SQCh. 8 - Prob. 15SQCh. 8 - Prob. 16SQCh. 8 - Prob. 17SQCh. 8 - Prob. 18SQCh. 8 - Prob. 19SQCh. 8 - Prob. 20SQ
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- The change in consumer spending is 160 and the change in disposable income is 200. Calculate the value of MPCarrow_forwardIf the value of MPC is 0.8, find the value of multiplier.arrow_forwardWhich of the following statements is TRUE? A. The spending multiplier is calculated as 1/MPC B. The proportion of any income that is spent rather than saved is called the spending multiplier C. MPC is always equal to MPS D. The value of the spending multiplier will increase if MPC increasesarrow_forward
- We have observed that consumption is 100 when income is 0 and consumption is 400 when income is 500. What is the spending multiplier? 1 2.5 3.5 4arrow_forwardIs the mpc in the multiplier .75? only because multiplier is 1/(1-mpc) which would make sense for .25 1-.75=.25 however what is mps?arrow_forwardIn the goods market when C(Yd) = c0 + c1Yd, the multiplier is bigger when:A. The marginal propensity to consume (c1) is smaller.B. The marginal propensity to consume (c1) is larger.C. The exogenous component of consumption (c0) is larger.D. The exogenous component of consumption (c0) is smaller.E. None of the above.arrow_forward
- Which of the following has the largest multiplier asssociated with it? A) MPC = 0.6 B) MPC = 0.8 C) MPC = 0.9 D) MPC = 0.7arrow_forwardCameron’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. 700arrow_forwardIf the MPC (Marginal Propensity to Consume) value of an economy is 0.8 then... a) Multiplier = 1.25 b) Multiplier = 5 c) Undefined multiplier d) MPS = 0.4arrow_forward
- Assume that Consumption is C = c(Y-T); Taxes T = tY; Investment / = -bi; and Government expenditure (G) is exogenous. Determine the multiplier for an increase in the tax rate.arrow_forwardWhen the economy is in a recession, the government will want to increase output. If the multiplier equals 2.5 and the government increases spending by 200, how much will output increase by? A) 900 B) 300 C) 500 D) 100arrow_forwardIf government spends $10B and the MPC in the economy is .8. What will be the total change in GDP?arrow_forward
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