If we plot the accounting definiton Y = C +1 and the consumption function C=cY on axes labelled C and Y, an increase in the popensity to consume will lead to: a. a change in the slope of the national accounting definition b. a change in the slope of the consumption function c. a change in the intercept of the national accounting definition d. a change in the intercept of the consumption function
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If we plot the accounting definiton Y = C +1 and the consumption function C=cY on axes labelled C and Y, an increase in the popensity to consume will lead to:
a. a change in the slope of the national accounting definition
b. a change in the slope of the consumption function
c. a change in the intercept of the national accounting definition
d. a change in the intercept of the consumption function
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- Linear equations for the consumption and saving schedules take the general form C = a + bY and S = -a + (1 - b)Y, where C, S, and Y are consumption, saving, and national income, respectively. The constant a represents the vertical intercept, and b represents the slope of the consumption schedule.a. Use the following data to substitute numerical values for a and b in the consumption and saving equations. b. What is the economic meaning of b? Of (1 - b)? c. Suppose that the amount of saving that occurs at each level of national income falls by $20 but that the values of b and (1 - b) remain unchanged. Restate the saving and consumption equations for the new numerical values, and cite a factor that might have caused the change.Disposable Consumption income expenditure (€, thousands) (€, thousands) 200 220 300 300 400 380 500 460 According to the data in the above table, calculate the marginal propensity to consume (MPC). Give only a numerical answer. Where needed, use only a point (.) for decimals (e.g., 3.25, not 3,25) and no thousands separator (e.g., 2000, not 2,000).Price level (GDP deflator, 2000 = 100) 130 120 110 100 90 0 1) 0.2. 2) 0.4. 3) 0.1. 9.6 4) 0.8. B AD2 A In the above figure, if the slope of the aggregate expenditure function is 0.75, to shift the aggregate demand from AD1 to AD2 the government needs to decrease its autonomous expenditure by AD₁ ADO 9.8 10.0 10.2 10.4 10.6 Real GDP (trillions of 2000 dollars)
- An economy's consumption function is depicted in the table below. Consumption (C) ($ billions) 100 199 298 Disposable Income (Yd) ($ billions) 0 110 220 330 440 550 397 496 595 W The economy's MPC is equal to: Round your final answer to 2 decimal places, if necessary. Do not enter a comma "," or a dollar sign ($) while entering your answer.Economics a) Discuss the determinants of aggregate consumption and aggregate investment. Base onhistorical Australian data, which tends to fluctuate more – investment or consumption? You must also answer why it does this, Data must be sourced. (500 Word count) b) Suppose bad economic stats led investors to be more negative about futureprospects on earnings on investment projects. With the help of diagrams, review theimpact of this change on aggregate consumption and income. Word limit 600If combine the accounting definition E= C+I and the consumption function C=co + cY to give an equation in which expenditure is a function of output, E = f (Y), and we plot this function on axes with income on the horizontal axis and expenditure on the vertical axis, a reduction in the marginal propensity to consume will lead to: a. a shift downwards in the line with unchanged slope b. a less steep line c. a shift upwards in the line with unchanged slope d. a steeper line
- In Eiffel Land, the autonomous consumption is 2000, the mpc is 0.6, net taxes are 200, planned investment is 5000, government spending is 2500 and net exports are 300. What is the planned aggregate expenditure of the economy? Question 20 options: 1) 1880 + 0.6Y 2) 9680+0.6Y 3) 9680+0.4Y 4) 9800+0.6YAssuming that each of the following functions are linear, give an economic interpretation of the slope ofthe function:a. C(Y) is the national consumption when national income is Yb. S(Y) is the total national savings when national income is YExplain the expenditure measure of GDP. What is the underlying assumption of this measure? Provide one example where the underlying assumption is violated. Explain the income measure of GDP. What is the underlying assumption of this measure? Provide one example where the underlying assumption is violated. Explain why we need to compute nominal GDP, real GDP, and per capita GDP. Why does every economy have a natural rate of unemployment (NRU)? Can the actual unemployment rate measured by Statistics Canada be greater or lesser than the NRU? If so why? Assume that the economy has a recessionary gap. Explain how the economy will remove this gap without government intervention. Use graphs to illustrate your answer. Assume that the economy has an inflationary gap. Explain how the economy will remove this gap without government intervention. Use graphs to illustrate your answer.
- Refer to the information provided in Table below to answer the question. Aggregate Income ($billion) Aggregate Consumption (Sbillion) 0. 80 50 125 170 on 100 150 215 260 200 Refer to Table The equation for the aggregate consumption function is Select one: a. C = 80 + 0.95Y. O b. C = -80 + 0.45Y. C. C 80 + 0.9Y. d. C = 80 + 0.75Y.What is the vertical intercept of the consumpation function that represents the portion ofconsumption expenditure not associated with a level of disposable income?a. Consumption interceptb. Disposable income intercept c. Autonomous consumption d. Automatic consumption lineConsider an economy characterized by the following equations: C = 750 +0.75Y+0.10W 1 = 150 where C is desired consumption, I is desired investment, W is household wealth, and Y is national income. a. Suppose wealth is constant at W = 10,000. Use the line drawing tool to draw and label the aggregate expenditure function on a scale diagram along with the 45° line to the right. Make sure that the line starts at y-axis and extends to the right. Carefully follow the instructions above, and only draw the required objects. Desired Aggregate Expenditures Aggregate Expenditure and Equilibrium 10,000- 9,000- 8,000- 7,000- 6,000- 5,000- 4,000- 3,000- 2,000- 1,000- 0 45 line 2,000 4,000 6,000 8,000 10, Actual National Income