MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 8, Problem 6SQ
To determine
The vertical intercept illustrates the level of consumption that is not associated with level of disposable income.
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Students have asked these similar questions
The Average Propensity to Consume is:
A.
the percentage of disposable income that is consumed
B.
the percentage of disposable income that is saved
C.
the percentage of disposable income that is spent
D.
the percentage of disposable income that is invested
(a) Explain the difference between induced consumption expenditure and autonomous consumption expenditure. Why is not all consumption expenditure induced expenditure?
（b） How is it possible for households to have a negative savings rate and what has caused this negative household savings rate? Is this negative household savings rate sustainable in the long run?
a) With the aid of a consumption function, highlight the main determinants of consumption.
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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- in an economy C is equal to 300+0.5 Y and I= Rs.600 where C is consumption and Y is income calculate (a) equilibrium level of income (b) the consumption expenditure at equilibrium level of an income.arrow_forwardHow is it possible for consumption expenditure to be positive even when disposable income is zero?Why is it necessary for there to be some consumption when disposable income is zero, and what is this called?arrow_forwardDraw the consumption function as the relation of the consumer's income and expenditure. What does the slope of the consumption function depend on? Is the consumer's income the only factor determining the level of his consumption spending?arrow_forward
- Is the following statement TRUE or FALSE? Please provide reason for the answer. The positive relationship between consumption expenditure and disposable income can be shown by a positive slope of consumption curvearrow_forwardAssume the following consumption schedule: C= 20 + 0.9 Y, where C is consumption and Y is disposable income. At $1,100 level of disposable income: (show your cacuators) a. Find out the level of saving and consumption? b. How much are the APC and APS (to one decimal place)? c. If dispr able income increased to $2,800 and saving is $345 now. What are MPC and MPŚ (to two decimal places)?arrow_forward2. Suppose you are economist and have the following data: Consumption; Income; 75 253 85 185 98 212 108 180 118 185 You want to investigate the effect of income on consumption. a)Write and estimate your model b)interpret the resultsarrow_forward
- Clearly explain the characteristics of the consumption function.arrow_forwardAn economy's consumption function is depicted in the table below. Consumption (C) ($ billions) 100 199 298 Disposable Income (Yd) ($ billions) 0 110 220 330 440 550 397 496 595 W The economy's MPC is equal to: Round your final answer to 2 decimal places, if necessary. Do not enter a comma "," or a dollar sign ($) while entering your answer.arrow_forwardThe slope of the line between points a and b is 4 .25 -4 -.25arrow_forward
- elaborate three determinants in which consumption can be increased according to the consumption functionarrow_forwardMake a graph based off the following: Construct a consumption function from the data given here and determine the MPC.arrow_forwardExplain the difference between induced consumption expenditure and autonomous consumption expenditure. Why is not all consumption expenditure induced expenditure?arrow_forward
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