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Problem No. 2 From following date compute (i) Real GDP (ii) GDP deflator (iii) inflation rate Year Nominal GDP Rs. billion CPI 2018-19 54195 228.1 2020-21 61583 251.3
(i) Real GDP in 2020-21 is:Yr = 61583×228.1/251.3 = 55897.66. (ii) GDP deflator is: Deflator = 61583/55897.66×100 = 110.17.(iii) Inflation rate is 110.17 - 100 = 10.17%.
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If the discretionary income in a nation rises from $13 trillion to $15 trillion and consumption spending increases from $12 trillion to 13.5 trillion what is the marginal propensity to consume?
marginal propensity to consume = (consumption spending2 - consumption spending1)/( income2 – income1) = ($13.5 - $12) / ($15-$13) = 0.75
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In the circular flow of income and spending, i.e. the basic flow of income and spending between households and firms supplemented by the foreign, financial and government sectors,
The circular flow of income and spending describes how the GDP is in fact redistributed between the different economic agents of a national economy. These agents include households, firms, governmental...
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If the base year prices are used during the measurement of GDP, then the.................is obtained.
1) Current GDP
2) Gross national product
3) Real GDP
4) Nominal GDP
3) Real GDP
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If marginal propensity to save is 3/4, then the marginal propensity to consume is
MPC or Marginal propensity to consume is also given as, (1-MPS). Where, MPS is marginal propensity to save.So, if MPS =3/4Then MPC = (1-3/4) = 1/4 or 0.25
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If the marginal propensity to consume equals 0.75, what change in government spending financed by borrowing from the private sector could eliminate the gap identified in part (a)
A change in government spending that can eliminate the gap identified should be equal to the taxation offered to private sector
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If the marginal income is $5,000 and the marginal propensity to save is 0.30, savings is: A. $90 B. $1,590 C. $3,500 D. $1,500 E. None of the above
D. $1,500
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Assume an economy has no imports and no taxes. If the marginal propensity to save is 0.8, by how much would autonomous expenditure have to increase, to cause real gdp to rise by 100 billion
If consumers spend 80 cents out of each dollar of disposable income, we can conclude that the government spending multiplier in a simple Keynesian model is 20.The multiplier will be 1...
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if the marginal propensity to save is 3/4,then the marginal propensity to consume is
(1) 1
(2) 4
(3) 1/5
(4) 1/4
(4) 1/4
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One of the following best explains consumption spending Select one: a. Spending on infrastructure b. None of the option are correct c. Spending on capital goods d. Spending on final consumer goods
\d. Spending on final consumer goods
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