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- Consider the following table, which shows a household's disposable income and consumption expenditures. All values are expressed in dollars. Compute the marginal and average propensities to consume for each level of income and fill in the table. (Round your responses to two decimal places) Disposable Income (Y) 0 300 600 900 1,200 1,500 Desired Consumption (C) 420 660 900 1,140 1,300 1,620 MPC-ACIAY NA APC = C/Y₂ NA21- The purchase of a new car falls under which of the following types of expenditure? A) C B) M C) G D) X E) I5. The multiplier effect of a change in government purchases
- 1. Calculate the value of the multiplier 2. Calculate the equilibrium leve of income11. Assume that Government Spending (G) decreases by 25, what will be the change in Output (Y) if (a) MPC 0.8. (b) MPC-0.75. (c) MPS=0.4. (d) MPS=0.3.The multiplier 15) If the consumption function is C = $800 billion + 0.8Y (a) What is the MPC? (b) How large is autonomous C? (c) How much do consumers spend with incomes of $4 trillion? (d) How much do they save?
- 4. If you save $20 when you experience a $200 rise in your income:(A) your marginal propensity to save is 0.2. (B) your marginal propensity to consume is 0.9.(C) your marginal propensity to consume is 0.1.(D) your marginal propensity to consume is 0.8.1. Draw a graph to illustrate the desired aggregate expenditures of an economy whose participants have the following spending plans: C= $10 + 0.8Y I= $20 G= $30 X-M = $10 (a) What is the value of equilibrium output? (b) Assuming that the full-employment level of output is $300, what kind of gap exists and how large is it? Identify the gap on the graph. (c) How much are consumers saving at full employment?(a) What is the current equilibrium level of national income? = (b) What is the level of injections 5+ 8 + 7= 206 (c) What is the level of withdrawals o 60+5+8+710-70 yoour TR:7bS-? (d) Assuming that tax revenues are 7 billion, how much is the level of savings? 13-50 040 (e) If national income now rises to 80 billion, and as a result, the consumption of domestically produced goods rises to 58 billion, what is the mpca (f) What is the value of multiplier? (g) Given the initial level of national income of 80 billion, now assume that spending on exports rises by 4 billion, spending on investment rises by 1 billion, and government expenditure falls by 2 billion. By how much the national income will change? 83 Q2, You find the following economic data for a closed economy Utopia: Marginal propensity to consume = 0.6, Investment = 30, Governement spending = 20 Government revenues =20 (Tax collection) People will consume a minimum of 10, no matter what their income is. 4=80 2. I=6 1. What is…
- Consider this economy: C = 100 + 0.5Y |= 400 + 0.1Y Drag and drop options on the right-hand side and submit. For keyboard navigation... SHOW MORE V Marginal propensity to consume 1000 Multiplier 0.5 Income of equilibrium 500 Consumption of equilibrium 1250 Investment of equilibrium 2.5 600 525 725 II II II II II II II II II3. What is equilibrium income ($output), ye? $6,900 $3,450 $5,450 $5,050 $2,0507. Study Questions and Problems #7 Suppose Sean has a total taxable income of $30,000, and he must pay $3,000 in taxes for clothing purchased this year. Yvette has a total taxable income of $65,000. The average tax rate for Sean is %. Based on Yvette's taxable income and the average tax rate you found for Sean in the prior question, calculate the minimum amount of tax Yvette must pay to achieve each tax structure listed in the following table. Type of Tax Structure Regressive Progressive Proportional Tax Needed to Achieve Tax Structure (Dollars)