MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 9, Problem 11SQ
To determine
The increase in MPC and the impact on spending multiplier.
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Students have asked these similar questions
Which of the following statements is most accurate?
a.Most of the variation in consumption spending can be explained by changes in debt
b. There is no single factor that explains much of the variation in consumption spending
c. Most of the variation in consumption spending can be explained by changes in the interest rate.
d. Most of the variation in consumption spending can be explained by changes in wealth
e. most of the variation in consumption spending can be explained by changes in disposable income.
Explain the basic idea of the expenditure multiplier and the role consumers' play.
Calculate the Marginal Propensity to Consume and the Marginal Propensity to Save. Fill in the blanks in the following table. Show that the MPC plus the MPS equals 1.
National Income & Real GDP (Y)
Consumption (C)
Saving (S)
MPC
MPS
$9,000
$8,000
$10,000
$8,600
$11,000
$9,200
$12,000
$9,800
$13,000
$10,400
Chapter 9 Solutions
MACROECONOMICS FOR TODAY
Ch. 9.4 - Prob. 1YTECh. 9 - Prob. 1SQPCh. 9 - Prob. 2SQPCh. 9 - Prob. 3SQPCh. 9 - Prob. 4SQPCh. 9 - Prob. 5SQPCh. 9 - Prob. 6SQPCh. 9 - Prob. 7SQPCh. 9 - Prob. 8SQPCh. 9 - Prob. 9SQP
Ch. 9 - Prob. 10SQPCh. 9 - Prob. 1SQCh. 9 - Prob. 2SQCh. 9 - Prob. 3SQCh. 9 - Prob. 4SQCh. 9 - Prob. 5SQCh. 9 - Prob. 6SQCh. 9 - Prob. 7SQCh. 9 - Prob. 8SQCh. 9 - Prob. 9SQCh. 9 - Prob. 10SQCh. 9 - Prob. 11SQCh. 9 - Prob. 12SQCh. 9 - Prob. 13SQCh. 9 - Prob. 14SQCh. 9 - Prob. 15SQCh. 9 - Prob. 16SQCh. 9 - Prob. 17SQCh. 9 - Prob. 18SQCh. 9 - Prob. 19SQCh. 9 - Prob. 20SQ
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- What are the four categories of aggregate expenditure (demand)? Give an example of each. 9.1 Calculate the Marginal Propensity to Consume and the Marginal Propensity to Save. Fill in the blanks in the following table. Show that the MPC plus the MPS equals 1. National Income & Real GDP (Y) Consumption (C) Saving (S) MPC MPS $9,000 $8,000 $10,000 $8,600 $11,000 $9,200 $12,000 $9,800 $13,000 $10,400arrow_forwardWhen the MPC increases: a. the government spending multiplier stays the same b. the government spending multiplier decreases c. the government spending multiplier also increases d. the government spending multiplier could increase or decreases e.depending on whether government spending is increasing or decreasingarrow_forwardWhich of the following would be most likely to increase consumption spending? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a A reduction in consumer credit card debt A drop in stock prices A higher interest rate C d The expectation of lower future pricesarrow_forward
- What can we predict about the effect on consumption of an increase in government spending? A) Consumption will increase by an amount equal to the MPC times the change in real GDP. B) Consumption will increase by an amount equal to the MPC times the change in government spending. C) Consumption will increase by the amount of the government spending. D) Consumption will not rise as government spending risearrow_forwardWhich of the following would be most likely to increase consumption spending? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a A reduction in consumer credit card debt b A drop in stock prices A higher interest rate d The expectation of lower future pricesarrow_forwardThe value of multiplier is 1.35 Calculate the value of Marginal propensity to savearrow_forward
- 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 onearrow_forwardGDP, Billions Consumption, Billions $100 $120 200 200 300 280 400 360 500 440 600 520 700 600 c. Now suppose a proportional tax with a 10 percent tax rate is imposed instead of the regressive tax. Calculate and graph the new consumption schedule, and calculate the MPC and the multiplier.arrow_forwardBriefly discuss the following concepts iv. Government expenditure multiplierv. Potential outputarrow_forward
- I'm doing economics homework and I'm having trouble findong the MPC. In this particular problem, consumers' disposable income increased by $525 billion and their spending increased by $283 billion.arrow_forwardDisposable 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_forwardwhat is MPC, MPS and spending multiplier?arrow_forward
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