Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

a. Calculate the marginal propensity to consume (MPC). b. Calculate the marginal propensity to saving (MPS). c. Calculate the multiplier. d. What is autonomous consumption

image text in transcribed
a. Calculate the marginal propensity to consume (MPC). b. Calculate the marginal propensity to saving (MPS). c. Calculate the multiplier. d. What is autonomous consumption in Pinkland? e. Construct the consumption function and saving function. f. Calculate saving when disposable income equals to $500 and $2,000. The following information is about disposable income (Yd) and consumption (C) for country of Darul Aman: Disposable Income Consumption (millions of RM) ( millions of RM) 100 150 200 200 300 250 400 300 a. Construct the consumption function. b. Draw the consumption function. c. Assume that investment in Darul Aman = RM100 millions. At what income level savings equal to investment? Calculate the multiplier and explain its meaning. Given that the following data (figures in millions of RM): Consumption (C) = 500 + 0.8Y Investment (1) = 40 Government spending (G) = 50 Given that, Y = TE where Y = GDP a. What is the MPC and MPS. b. Based on the information provided, calculate the equilibrium level of national income C. Draw the national income equilibrium curve based the answers in (b). Assume government spending (G) increased by 10 millions, calculate the equilibrium level of income using the concept of multipliers

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Economics questions