MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 9, Problem 8SQ
To determine
The ratio of change in GDP to initial change in AE.
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The consumption expenditure and output of the country is 500 billion and 100 billion respectively. Calculate the average propensity to consume.
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.
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
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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- In an economy, income rises by $10,000 as a result of rise in investment Expenditure by $1000. Calculate (A) Investment multiplier (b) MPCarrow_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_forwardbased on macroeconomic theory, one of the following four answers is a correct description of the concept, “expenditure multiplier”. Which one? A/ It is the idea that decreasing national income affects the equilibrium level of GDP by the same amount of that decrease in income. B/ It is the concept that increasing national income affects the equilibrium level of GDP on par with the amount of increased income. C/ The expenditure multiplier is the idea that a given change in spending leads to an equal change in the equilibrium level of GDP. D/ It is the concept that an increase in spending causes a more than proportionate change in GDP.arrow_forward
- 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_forwardWhich 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.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_forward
- In an economy investment increases by 120 crores. The value of multiplier is 4. Calculate the marginal propensity to consume.arrow_forwardExplain the difference between induced consumption expenditure and autonomous consumption expenditure. Why is not all consumption expenditure induced expenditure?arrow_forwardWhy are changes in inventories included as part of investment spending? Suppose inventories declined by $1 billion during 2008. How would this affect the size of gross private domestic investment and gross domestic product in 2008? Explain.arrow_forward
- Calculate the value of final Consumption Expenditure when the value of national income is $5000 , autonomous consumption is $1000 and marginal propensity to consume is 0.8arrow_forwardI'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_forwardIn the aggregate expenditure model the investment curve is A. Upward sloping B. Downward sloping C. a horizontal line D. a vertical linearrow_forward
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