An economy has a consumption function: C = 400 + .9DI Investment is 1,000. Government purchases are 900 and net taxes are 400. Net exports are -50. From the model above, the equilibrium level of output is 19,900. b. 18,900. 17,000. d. 17,900. 16,500 a. с. е.
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- Q.30. C = 100 + 0.4 Y is the Consumption Function of an economy where C is Consumption Expenditure and Y is National Income. Investment expenditure föfeign exchange etc. financing, is 1100. Calculate: () Equilibrium level of National Income.If consumption is $30,000 when income is $35,000, and consumption increases to $36,000 when income increases to $43,000, the MPC is Select one: a. 0.80. b. 0.95. C. 0.75. d. 0.65.An economy has a consumption function: C = 400 + .9DI Investment is 1,000. Government purchases are 900 and net taxes are 400. Net exports are -50. 6. From the model above, the equilibrium consumption spending is a. 1,6150. b. 17,950. 18,150. d. 17,410. e. 17,050 с.
- Assume an economy where spending for each sector is: Household: C = 800 +0.95Qd Business: I=3000 Public: G = 4,000, Tr = 7,000, Tx = 1,000 + 0.3Q Foreign X = 1,700 , Im = 200 + 0.165Q 2. Solve for autonomous spending 3. Spending Multiplier 4. Disposable Income 5. Consumption Expenditure 6. Household Saving 7. Imports 8. Net Exports 9. Government Expenditure 10. Budget DeficitIf autonomous planned investment increases by $100, and the MPC = 0.8, in the first round of spending GDP will increase by ___ and lead to an increase in consumer spending of ___. The second round of increase in GDP will be ___. A. $80; $80; $64 B. $100; $100; $80 C. $100; $80; $80 D. $80; $64; $64In 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+0.6Y
- (a)Elaborate THREE (3) determinants in which consumption can be increased according to the consumption function. (b)Assume that a three-sector economy in Country W. The amount of autonomous consumption is RM300 million with the proportion of an increase in income that is spent on consumption is 0.5. An induced tax of 20% is imposed by the country. The amount of investment is RM250 million, and the amount of government spending is RM150 million. (i)Calculate the national income equilibrium. (ii)Based on your answer in (i), show the aggregate expenditure graph. (iii)Explain what would happen to the national income equilibrium if the investment changes by RM100 million.16. Find consumption expenditure from the following National Income =Rs. 5000 Autonomous Consumption = Rs. 1000 Marginal Propensity to Consume = 0.8 %3DFind the consumption expenditure from the given information:- Autonomous consumption- 100 Marginal propensity to consume - 0.70 National income - 1000
- 1. Given the following table. Income (RM million) Consumption (RM million 100 100 150 200 200 300 250 400 300 500 350 а. How much is the autonomous consumption in the economy? b. How much investment should be increased to achieve an income of RM400 million? c. Calculate the MPS. d. Derive the consumption function.Given the consumption function C=$500bil + 0.8Y, an increase in disposable income from $6,000 billion to $7,000 billion will cause consumption to: A.increase by $1,000 bil. B.decrease by $800 bil. C.increase by $800 bil. D.decrease by $1,000.Assume that total expenditure E comprises the sum of government consumption, G, household consumption, C, and investment, I. Assume a closed macroeconomic system, so that income equals expenditure Y=E. If we define household saving, SH, as SH=Y-T-C, where the cunsumption function is a fixed proportion of disposable income, C=c(Y-T), which of the following will be true? a. Higher government spending alongside unchanged taxation will lead to higher investment and higher household saving b. Higher government spending alongside unchanged taxation will have no effect on household saving or investment c. Higher government spending alongside unchanged taxation will lead to higher household saving d. Higher government spending alongside unchanged taxation will lead to lower household saving