Exhibit 10-9 Marginal Propensity to Consume (MPC) Marginal Propensity to Save (MPS) Multiplier (m) 0.92...
Exhibit
10-9
|
Marginal Propensity to Consume (MPC) |
Marginal Propensity to Save (MPS) |
|
|
0.92 |
(A) |
(B) |
|
(C) |
(D) |
10 |
|
0.85 |
(E) |
(F) |
|
(G) |
0.20 |
(H) |
Refer to Exhibit 10-9. What is the value of the marginal propensity to save (MPS) that would correctly fill in blank (E) and the multiplier that would correctly fill in blank (F)?
0.012; 0.83
0.12; 88
0.15; 15
0.15; 6.67
Homework Answers
Marginal Propensity to save or MPS = 1 - Marginal Propensity to Consumer (MPC)
For MPC= 0.85, MPS = 1 - 0.85 = 0.15
Thus, the MPS in column (E) will be 0.15.
And Multiplier (m) = 1/1-MPC = 1/MPS = 1/0.15 = 6.67
Thus, m in column (F) will be equal to 6.67.
Therefore, option 4. 0.15; 6.67 is correct.
Add Answer to:
Exhibit
10-9
Marginal
Propensity to Consume (MPC)
Marginal
Propensity to Save (MPS)
Multiplier (m)
0.92...
Marginal Propensity to Marginal Propensity to Consume (MPC) Save (MPS) Multiplier (m) 0.92 10 0.85 0.20 23). a). In th...
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1. If the MPS = 0.2, then the multiplier equals: * 4 5 9 10 2....
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Marginal Propensity to Marginal Propensity to Consume (MPC) Save (MPS) Multiplier (m) 0.92 10 0.85 0.20 23). a). In the above table, what is the value of the marginal propensity to consume MPC) that correctly fills in blank (G) and the value of the income multiplier that correctly fills in blank (H)? Page 9 b)When the MPC increases, the income/spending multiplier (increases or decreas es). If MPC decreases? 17)Draw an AD and SRAS graph and label the axis, lines and...
ue or false. MPC+ MPS 1 o True O False Correct. Marginal propensity to consume plus marginal propensity to save equals 1. of aggregate expenditure is 5 MPcio 8 when the MPC is.8 and there is an increase in investment spending of $100,000. x Incorrect. First determine the expenditure multiplier, then multiply that by $100,000 to obtain the correct answer True or false. If people save more of their income, the expenditure multiplier will not decrease and aggregate expenditures will...
10.) An economy has a marginal propensity to consume and Y* , income-expenditure equilibrium GDP, equals $500 billion. Given an autonomous increase in plannėd investment of $10 billion, show the rounds of increased spending that take place by completing the accompanying table. The first and second rows are filled in for you. In the first row the increase of planned investment spending of $10 billion raises real GDP and YD by $10 billion, leading to an increase in consumer spending...
FART I TRUE FALSE QUESTIONS (10 points). Please write True (1) or False (F) on the blank Scarcity is the intimited nature of society's resources given society's limited wants 2. A reward is a type of positive incentive. 3. To remove difficulty of double coincidence of wants we use money. 4. An exogenous factor is a variable that can be controlled for inside the model. 5. The PPF will not have a constant slope. 6. The law of demand states...
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