MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 8, Problem 17SQ
To determine
The 45-degree line in the exhibit.
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The figure represents the consumption function for a consumer. The distance between C and D represents
A. the amount of saving.
B. the amount of autonomous consumption.
C. the amount of dissaving.
D. the point where saving equals zero.
Answer the next questions on the basis of the following information about a two-sector economy:
Item
Amount
Breakeven level of national income
450
The Average Propensity to save (APS) At national income level of (1000)
0.22
Investment Expenditures
60
Full Employment of National Income
700
1. The Marginal Propensity to Consume (MPC) is:
A. 0.50
B. 0.60
C. 0.70
D. 0.75
2. The Multiplier is:
A. 2.5
В. 3
C. 4
D. 5
The change in consumption divided by the change in disposable income is equal to
A.
household saving.
B.
the slope of the consumption function.
C.
real GDP.
D.
aggregate expenditure.
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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Similar questions
- Disposable income is the amount a household has A after subtracting autonomous spending. B after subtracting taxes and transfer payments to income. C sometimes called discretionary spending. D available for consumption spending and saving.arrow_forwardThe consumption function is relationship between consumption and: Select one: a. planned aggregate expenditure. b. total spending. c. investment. d. disposable income.arrow_forwardSaving = a. disposable income minus taxes b. income minus taxes c. 1 – MPC d. disposable income minus consumptionarrow_forward
- Explain why investment (I) varies more from year-to-year than consumption (C).arrow_forwardInduced Consumption is: A. that part of consumption that varies with the level of GDP B. that part of consumption that varies with nondurable goods C. that part of consumption that varies with durable goods D. that part of consumption that varies with the level of disposable incomearrow_forwardQ.1.14 In the Keynesian model, what is the most important determinant of a household’s consumption?(a) Disposable income.(b) Total wealth.(c) The number of persons in the household.(d) Its’ net wealth.arrow_forward
- 7.C = a + byd, where a refers to autonomous consumption. Autonomous consumption is a.saving when income is zero b.consumption when income is zero c.consumption when income equals 1 d.saving when income equals 1arrow_forwardAnswer the following questions concisely. Differentiate aggregate expenditure from consumption expenditure. What is disposable income? Explain the following: 1.Marginal propensity to consume 2.Induced expenditure 3.Savings 4.Life Cycle theory of Consumptionarrow_forwardUse the graph, table, and/or equation above. If GDP is 65, then unplanned investment is positive, and firms respond by increasing production in the future. unplanned investment is positive, and firms respond by decreasing production in the future. unplanned investment is negative, and firms respond by increasing production in the future. unplanned investment is negative, and firms respond by decreasing production in the future. unplanned investment is zero, the economy is at equilibrium, and firms do not change their production in the future.arrow_forward
- The aggregate expenditure function in a simple macroeconomic model with a close economy and no government is the sum of a. Wished for consumption and wished for investment b. Saving as well as the intended investment c. Expenditure and disposable income d.arrow_forwardQuestion 1: In an economy C = 350 + 0.75 Y is the consumption function where C is consumption expenditure and Y is national income. Investment expenditure is 4,000. a) Calculate equilibrium level of income. b) Calculate consumption expenditure.arrow_forwardAssume that the consumption function for the above economy is C = 1000 + .75Yd fill in the empty cells. (All Figures are in Billions of Dollars) Output Taxes Disposable Income Consumption Spending Saving Investment Government Aggregate Expenditure 5000 1000 750 750 7000 1000 750 750 9000 1000 750 750arrow_forward
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