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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What is the vertical intercept of the consumpation function that represents the portion ofconsumption expenditure not associated with a level of disposable income?a. Consumption interceptb. Disposable income intercept c. Autonomous consumption d. Automatic consumption line
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?
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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- a) With the aid of a consumption function, highlight the main determinants of consumption.arrow_forwardin 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_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
- Assume 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 $345 now. What are MPC and MPŚ (to two decimal places)?arrow_forwardClearly explain the characteristics of the consumption function.arrow_forwardAn economy's consumption function is depicted in the table below. Consumption (C) ($ 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_forward
- Saving = a. disposable income minus taxes b. income minus taxes c. 1 – MPC d. disposable income minus consumptionarrow_forwardelaborate 3 determinants in which consumption can be increased according to the consumption functionarrow_forwardIs 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_forward
- The consumption function is a straight-line relationship between consumption and income. True O Falsearrow_forward1. Given the following table. Income (RM million) Consumption (RM million 0. 100 100 150 200 200 300 250 400 300 500 350 a. How much is the autonomous consumption in the economy? b. How much investment should be increased to achieve an income of RM400 million? c. Calculate the MPS. d. Derive the consumption function.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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