MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 9, Problem 19SQ
To determine
The value of the spending multiplier.
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Students have asked these similar questions
Scenario 34-1. Take the following information as given for a small, imaginary economy:
• When income is $10,000, consumption spending is $6,500.
• When income is $11,000, consumption spending is $7,250.
Refer to Scenario 34-1. The multiplier for this economy is
a.
7.00.
b.
1.53.
c.
4.00.
d.
2.85.
If the multiplier is 5, then the MPC is
Answer
0.05
0.5
0.6
0.8
Question 43
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
Answer
$151.25.
$166.75.
$170.20.
$175.00.
Explain the basic idea of the expenditure multiplier and the role consumers' play.
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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- Below is some data for a hypothetical economy: C = -232 + 0.8Y XN = 107 - 0.1Y I = 100 T = 340 G = 340 Refer to the information above to answer this question. What is the value of the expenditure multiplier? a. 1.43 b. 4 c. 3.33 d. 2.43arrow_forwardGermany injects $100 into the United States by purchasing new software. If the spending multiplier for the U.S. is 5, then the total increase in spending will be: a. b. C. d. $250. $10. $20. $500.arrow_forwardCalculate the value of multiplier if change in income is $1100 million and the change in investment is $350 millionarrow_forward
- 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_forwardIn Russia, the value of multiplier is 7 Calculate the value of MPSarrow_forwardThe multiplier process depicted in the following table is based on an MPC of 0.75. Instructions: Round your responses to two decimal places. a. Recompute the first four cycles using an MPC of 0.94. Spending Cycles $ 6A 1 2 3 4 Change in Spending during Cycle (Billions per Year) $100.00 75.00 56.25 42.18 billion 4 MPC = 0.75 i. if the MPC = 0.75? c. What is the value of the multiplier Cumulative Increase in Spending (Billions per Year) $100.00 175.00 231.25 273.44 ii. if the MPC = 0.94? b. Given that the MPC is higher, how much more consumption occurs in the first four cycles when the MPC is 0.94 compared to when the MPC is 0.75? MPC -0.94 Change in Spending during Cycle (Billions per Year) $100.00 $ $ $ Cumulative Increase in Spending (Billions per Year) $ $ 94.00 88.36 $ 83.05 $ 100.00 194.00 282.36 365.41arrow_forward
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