Why does the marginal propensity to consume determine the size of the multiplier?

Question:

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Basic Economics

ISBN: 978-1111826642

16th edition

Authors: Frank V. Mastrianna

See More Books

Question Posted: Mar 08, 2018 09:56 AM

See More Questions

You are given the following information concerning income, transitory income, and permanent consumption (a) Calculate the amount of permanent income at each level of income. (b) Calculate the...
The marginal propensity to consume out of permanent income equals 0.9 and the marginal propensity to consume out of transitory income equals 0.1. Suppose that there is an emergency increase in...
Again assume that the marginal propensity to consume out of permanent income equals 0.9 and the marginal propensity to consume out of transitory income equals 0.1. However, instead of a one-time...
Given the functions f(x) = 2x and g(x) = x 1) Find the points of intersection of the curves and plot the graphs of the functions. 2) Determine the area bounded by the curves in the interval [-1,3] 3)...
The specific optical rotations of pure a- and -D-mannopyranose are +29.3 and -17.0, respectively. When either form is dissolved in water, mutarotation occurs, and the observed rotation of the...
Add the following accessor method to the Point class: public boolean isVertical(Point other) Returns true if the given Point lines up vertically with this Point, that is, if their -coordinates are...
Why should an organization strictly adhere to ethical standards wherever it operates? LO.1
Tom and Karen are economists. In an attempt to limit their son Harrys use of the family car, they charge him a user fee of 20 cents/ mile. At that price he still uses the car more than they would...
2) a)The price of a European call that expires in six months and has a strike price of $28 is $2. The underlying stock price is $27, and a dividend of $0.50 is expected in two months and again in...
1. Using Josephsons Six Pillars of Character, which of the character traits (virtues) apply to the May 2012 Harvard cheating scandal and how do they apply with respect to the actions of each of the...
Why does a high level of planned consumption make it easier to maintain a high level of employment?
Find the value of the multiplier when (a) MPC = 0.40 (b) MPS = 0.25 (c) MPC = 0.67 (d) MPS = 0.50 (e) MPC = 0.90 (f) MPC = 0.75.
The barn has a roof with a slope of 40 mm/m. It is located in an open field where the ground snow load is 1.50 kN/m 2 . Determine the snow load that is required to design the roof of the stall.
Q13. The probability that Ryan will roll a three using a standard die is 1/6. Let Y = number of times that Ryan has to roll a die in order to roll the first three. What is the expected value for Y?...
1. The following are data for two IT projects for a new database system. Prepare a spreadsheet for two projects, using the following data. Amounts are in thousands of dollars. Calculate the NPV for...
The Matsui Lubricants plant uses the weighted-average method to account for its work-in-process inventories. The accounting records show the following information for a particular day: Beginning WIP...
James Cook, a production department worker, is paid on hourly basis at a rate of $15 per hour. James works 40 hours per week. Any time James works over 40 hours, it is considered as overtime and he...
You just started working as a Health Service Manager within one of the following healthcare industries. First, choose an industry below to discuss the questions that follow: Ambulatory Surgery center...
Evaluate: 40!/4!38!
Read Case Study Google: Dont Be Evil Unless and answer the following: Why do you think Google was adamant about not wanting to supply information requested by the government concerning the Child...
Using the DD-AA model, analyze the output and balance of payments effects of an import tariff under fixed exchange rates. What would happen if all countries in the world simultaneously tried to...
When a central bank devalues after a balance of payments crisis, it usually gains foreign reserves. Can this financial inflow be explained using our model? What would happen if the market believed...
Suppose that under the postwar dollar standard system, foreign central banks had held dollar reserves in the form of green dollar bills hidden in their vaults rather than in the form of U.S. Treasury...
Comfort Golf Products is considering whether to upgrade its equipment Managers are considering two options. Equipment manufactured by Stenback Inc. costs $1,000,000 and will last five years and have...
Weaver Corporation had the following stock issued and outstanding at January 1, Year 1: 71,000 shares of $10 par common stock. 8,500 shares of $60 par, 6 percent, noncumulative preferred stock. On...
Read the following case and then answer questions On 1 January 2016 a company purchased a machine at a cost of $3,000. Its useful life is estimated to be 10 years and then it has a residual value of...

Why does the marginal propensity to consume determine the size of the multiplier?

Question:

Step by Step Answer:

Because the size of the multiplier depends on the amount of additional income that is spent ...View the full answer

Basic Economics

Students also viewed these Economics questions