Consider an economy that is described by the following: Autonomous consumption = 100 Autonomous investment = 100 Marginal propensity to consume = 0.75 a. What is the consumption function of this economy? b. Derive the equilibrium income of this economy? c. How large is the change in the equilibrium income if investment rises to 200?
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Consider an economy that is described by the following:
Autonomous consumption = 100
Autonomous investment = 100
Marginal propensity to consume = 0.75
a. What is the consumption function of this economy?
b. Derive the equilibrium income of this economy?
c. How large is the change in the equilibrium income if investment rises to 200?
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- Study the scenario and complete the question(s) that follow(s): Silesia You are provided with the following information about an imaginary economy called Silesia. Use the information provided in the table to answer the questions below. Government expenditure 400 Exports 250 Autonomous imports 50 Autonomous consumption 150 Investment Expenditure 300 Full-employment output 2040 Marginal propensity to consume 0.75 Marginal propensity to import 0.15 Таx rate 0.25 5.1 Derive and calculate the consumption function for the data provided. Show all formulas and calculations used. 5.2 Calculate autonomous spending. Show all formulas and calculations used. 5.3 Calculate the multiplier. Show all formulas and calculations used. Round off your final answer to 1 decimal. 5.4 Calculate the equilibrium level of income, using the values calculated in 5.2 and 5.3 above. Show all formulas and calculations used. 5.5 Calculate the government surplus or deficit at the equilibrium level of income. Show all…assume you are given a $100 raise, and decide to save $20 of that money. also assume that if you make zero income in a year, you will still spend $7000. a.) what is your consumption function? b.) if you earn $20000 in a year how much will you spend? c.) will you be able to save while earning the above income?Silesia You are provided with the following information about an imaginary economy called Silesia. Use the information provided in the table to answer the questions below. Government expenditure 400 Exports 250 Autonomous imports 50 Autonomous consumption 150 Investment Expenditure 300 Full-employment output 2040 Marginal propensity to consume 0.75 Marginal propensity to import 0.15 Source: Bester, N. 2017. Tax rate 0.25 5.1 Derive and calculate the consumption function for the data provided. Show all formulas and calculations used. 5.2 Calculate autonomous spending. Show all formulas and calculations used 5.3 Calculate the multiplier. Show all formulas and calculations used. Round off your final answer to 1 decimal.
- Which of the following will increase the slope of the demand curve in the goods market to indicate an increase in the level of output and income? Select one: a. An increase in autonomous investment. b. An increase in the marginal propensity to consume. c. An increase in government spending. d. An increase in taxation.Construct a consumption function from the data given here and determine the MPC. Given the consumption function in the above question, what is the relationship between disposable income and consumption?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.
- What does the consumption function showDraw 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?Calculate the equilibrium income by using the consumption function formula. 1. Y =C 2. Y= C+I 3. Y = C+I+G 4. Y= C+I+G+Nx Given: C = 100; I = 150; G = 100; m= 50; x=35; change in DY = 900; change in C = 630
- The consumption demand function merely states that as income goes up, households consume all their increased incomeMathematical economics: For an economy the following consumption function is given : C = 60+0.75 Y. %3D (a) If investment in a year is $35 crores, what will be the equilibrium level of income or output ? (b) If full-employment level of income (i.e., level of potential output) is $460 crores, what investment is required to be undertaken to ensure equilibrium at full employment ?The accompanying graph represents the aggregate consumption function for the small island nation of Pineapple Paradise. The people of Pineapple Paradise expect their future disposable income to increase. Use the graph to show an increase in consumption expenditures. What is the new level of aggregate autonomous consumer spending? 1 $1000 2 $3000 3 $2000 4 $4000