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Suppose the marginal propensity to consume (MPS) equals 0.20, an increase in autonomous investment of $100 will lead to an increase in real Gross Domestic Product (GDP) by:
Multiplier effect is an effect in economics, in which an increase in spending produces an increase in national income and consumption greater than the initial amount spent. If MPS =...
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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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Given the following consumption function: C= 100+ 0.2y. If income is equal to R2000 consumption will be
If C=100+0.2yThen y = 2000C=100+0.2*2000=500consumption will be R500
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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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autonomous consumption c1=R2000
autonomous investment =R6000
marginal propensity to consume c=3/4
the value of the multiplier is
(1) 3/4
(2) 1/4
(3) 5
(4) 4
(4) 4If MPC = 3/4 or 0.75, multiplier is=1/(1-0.75) = 1/0.25 = 100/25 = 4
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What will be the equilibrium level of income and level of consumption in equilibrium if C=30+0.8Y and autonomous investment is 50 crore
Equilibrium level of incomeC = 30+0.8YI = 50 croreY = C+IY = 30+0.8Y+50Y - 0.8Y = 30 + 500.2Y = 80Y = 400Equilibrium level of consumptionC = 30 + 0.8YC...
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Consider the following information: Marginal propensity to consume = 0,9 Investment = R180 million Autonomous consumption = R105 million. The equilibrium level of income is:- Question 2 options:
At Equillibrium, AD=ASY=C+IC=a+bYC=R105+0.9YY=R105+0.9Y+R108Y-0.9Y=R2130.1Y=R213Y=R213/0.1=R2130
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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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Depreciation cause? 1.Net investment = gross investment 2.Net investment > gross investment 3.Net investment < gross investment 4.Net investment = 0
.Net investment < gross investment
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