Use the consumption function shown to answer the following questions. At what level of income is consumption equal to disposable income? $ billion. Which of the following statements is true? OA. At an income level of $0 billion there is dissaving equal to $30 billion. OB. At an income of $100 billion there is dissaving of $20 billion. OC. Saving equals consumption at an income level of $60 billion O D. Consumption is $20 billion when the income level is $100 billion. Planned Real Consumption 110- 100- 90- 80- 70- 60 50- 40- 304 20- 10- 0- 0 10 C=Y₁₁ € 20 30 40 50 60 70 80 90 100 110 Real Disposable Income ($ billions) Q Q

Use the consumption function shown to answer the following questions. At what level of income is consumption equal to disposable income? $ billion. Which of the following statements is true? OA. At an income level of $0 billion there is dissaving equal to $30 billion. OB. At an income of $100 billion there is dissaving of $20 billion. OC. Saving equals consumption at an income level of $60 billion O D. Consumption is $20 billion when the income level is $100 billion. Planned Real Consumption 110- 100- 90- 80- 70- 60 50- 40- 304 20- 10- 0- 0 10 C=Y₁₁ € 20 30 40 50 60 70 80 90 100 110 Real Disposable Income ($ billions) Q Q

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 1.3P

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2. We have the following information on the economy: - Aggregate consumption is $1,000 when aggregate disposable income is zero. - When aggregate disposable income is $17,500, aggregate saving is $2,500. a. Find the equation for the aggregate consumption function. b. The planned investment in this economy is $2,000. Find the equation for the aggregate expenditure function.
6. You are given the following consumption function : C = RM150 million + 0.75Yd Based on the above consumption function, answer the following questions: a. Determine the saving function How much is : b. 1. Autonomous consumption II. Autonomous saving C. How much is the disposable income when saving is zero? d. If there an investment of RM200 million, what will be the new equilibrium level of income. e. If G = 100, calculate the new equilibrium level if government expenditure increased from RM100 to RM150 f. If I = 100, calculate the new equilibrium level if investment decrease to RM50
Assume the following consumption schedule: C= 20 + 0.9 Y, where C is consumption and Y is disposable income. At $1,100 level of disposable income: (show your cacuators) a. Find out the level of saving and consumption? b. How much are the APC and APS (to one decimal place)? c. If dispr able income increased to $2,800 and saving is $345 now. What are MPC and MPŚ (to two decimal places)?
A) What will be the new level of consumption at the $ 340 billion level of disposable income? B) What will be the new level of saving?
a. Fill in the missing numbers in the table. b. What is the break-even level of income in the table? What is the term that economist use for the saving situation shown at the $240 level income? c. For each of the following items, indicate whether the value in the table is either constant or variable as income changes: the MPS, the APC, the MPC, the APS. Level of Output and Income (GDP=DI) Consumption Savings APC APS MPC MPS $240 $ $-4 $260 $0 $280 $4 $300 $8 $320 $12 $340 $16 $360 $20 $380 $24 $400 $28
The table shows disposable income and consumption expenditure in an economy. Calculate saving when disposable income equals $200 billion. Over what range of disposable income does consumption expenditure exceed disposable income? Calculate autonomous consumption expenditure. >>> Answer to 1 decimal place. When disposable income is $200 billion, saving is______billion dollars. >>> If your answer is negative, include a minus sign. If your answer is positive, do not include a plus sign. When disposable income is greater than $800 billion, consumption expenditure exceeds disposable income. Autonomous consumption expenditure equals$___billion. Disposable income Consumption expenditure (billions of dollars) 200 350 400 500 600 650 800 800 1,000 950
5. Graphing the saving and consumption functions from MPC Consider a hypothetical economy in which the marginal propensity to consume (MPC) is 0.5. That is, if disposable income increases by $1, consumption increases by 50¢. Suppose further that last year, disposable income in the economy was $300 billion and consumption was $250 billion. Based on these data, use the blue line (circle symbols) to plot this economy's consumption function on the following graph. REAL CONSUMER SPENDING (Billions of dollars) 700 600 500 400 300 200 100 0 Aa Aa -100 Consumption Fn. O O 0 100 200 300 400 500 600 700 800 REAL DISPOSABLE INCOME (Billions of dollars) Help Clear All Suppose that this year, disposable income is projected to be $340 billion. Based on your analysis, you would expect consumption to be and saving to be
Is 3. Consumption function and non-income determinants The following graphs show an economy's initial position at point B along its consumption function C. Suppose disposable income suddenly and unexpectedly decreases. On the graph, shift either the C curve or the initial point on the C curve to show the impact of a fall in disposable income. Real Consumption Spending (Bilions of dollars) 0 Disposable Income (Billions of dollars) C 16 с 0 B Now suppose that there is an increase in the interest rate households are paid on money they save. On the following graph, shift either the C curve or the initial point on the C curve to show the impact of an increase in the interest
2. Suppose that consumption equals $500 billion when the disposable income is $0 and that each increase of $100 billion in disposable income causes consumption to increase by $70 billion. a. Draw a graph of the consumption function using this information. The axes must be labeled correctly, and the consumption function should have at least two points on the graph (correct coordinates). b. What is the Marginal Propensity to Consume in this economy? How did you arrive at your answer? Please show your work. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Question 34 Identify the correct statement with respect to consumption and saving function. Both the consumption function and the saving function have negative slopes. As disposable income declines, consumption and saving increase. O The consumption function has a negative slope while the saving function has a positive slope. As disposable income rises, consumption and saving increases. The consumption function has a positive slope while the saving function has a negative slope.
21. Which of the following equations is correct? A Saving = Disposable income + Consumption B- Saving = Disposable income x Consumption C- Disposable income = Consumption - Saving D- Saving = Disposable income - Consumption
3. If the consumption function is C= $200 billion + 0.9Y, a) How much do consumers spend with income of $3 trillion? b) How much do they save?