Question

How do changes in disposable income affect government purchases and the government purchase function? How do...

How do changes in disposable income affect government purchases and the government purchase function? How do changes in net taxes affect the consumption function?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Explain how changes in consumers’ wealth affects the consumption function vs. changes in consumers’ disposable income...
Explain how changes in consumers’ wealth affects the consumption function vs. changes in consumers’ disposable income Explain how changes in consumers’ expectations affects the consumption function
How do changes in government spending and taxes affect the equilibrium price level and real GDP?
How do changes in government spending and taxes affect the equilibrium price level and real GDP?
Question 1 The relationship between consumption and disposable income is such that as consumption rises, disposable...
Question 1 The relationship between consumption and disposable income is such that as consumption rises, disposable income falls disposable income rises, consumption falls disposable income rises, consumption rises disposable income rises, saving falls Question 2 The federal government’s principal tool in altering consumer spending is changing corporate taxes changing federal sales taxes changing unemployment insurance benefits changing personal income taxes Question 3 The difference between disposable income and consumption spending is transfer payments personal taxes saving personal investment Question 4...
Suppose that the German taxes and real imports do not depend on German real disposable income....
Suppose that the German taxes and real imports do not depend on German real disposable income. Autonomous real consumption is €500 billion, investment spending is €250 billion, lump-sum taxes (taxes that do not depend on real income) is €100 billion, German government spending is €100 billion, real net exports are €0 billion, and the German Marginal Propensity to Consume is 0.5. What is the value of the equilibrium German real GDP, Y*? €1,600 billion. €1,000 billion. €800 billion. €850 billion....
A consumption function shows the relationship between consumption and disposable income, holding non-income determinants of consumption...
A consumption function shows the relationship between consumption and disposable income, holding non-income determinants of consumption constant. Note that the unit of the currency is Zambian Kwacha (K). Disposable Income 10,000 12,000 14,000 Consumption 11,000 12,000 13,000 a) From the figures provided above find the consumption function. b) Find the consumption when disposable income is K11,000. How can a household consume more than its disposable income? c) What is true of every point on the 45o line? Provide a graph...
Assume that GDP (Y) is $6000, personal disposable income (Yd) is $5100, and the government budget...
Assume that GDP (Y) is $6000, personal disposable income (Yd) is $5100, and the government budget deficit (BD) is $200. Consumption (C) is $3800 and the trade deficit is $100. Also, assume that Yd = Y+TR-TA, where TR are the government transfers and TA are the taxes. a. How large is saving (S)? b. How large is investment (I)? c. How large is government spending (G)?
Suppose that a country’s tax changes do not impact its output. The government wants to lower...
Suppose that a country’s tax changes do not impact its output. The government wants to lower taxes by $81 million. If people generally spend 71% of their disposable income, how much would national savings change?
Honey land analysis its aggregate consumer spending and aggregate disposable income and finds the following data....
Honey land analysis its aggregate consumer spending and aggregate disposable income and finds the following data. All numbers in the table are dollars. YD C $0 $100 100 180 200 260 300 340 500 500 Assume Honey land is a closed economy with no government spending, no taxes, and no transfers, Furthermore, assume the aggregate price level and interest rate are fixed in Honey land. a. What does autonomous consumer spending equal in this economy? b. What is the value...
a. Studies indicate that the changes in fiscal and monetary policy affect the 3 economic agents...
a. Studies indicate that the changes in fiscal and monetary policy affect the 3 economic agents in the economy (households, firms and government). How do the changes in monetary and fiscal policy instruments affect you personally or work wise? Policymakers who want to stabilize the economy must decide how much to change the money supply, government spending, or taxes. Why is it difficult for policymakers to choose the appropriate strength of their actions? Which method do you think is better...
4. Suppose that consumption C is the following function of disposable income YD C = 200...
4. Suppose that consumption C is the following function of disposable income YD C = 200 + 0:8YD (a) What are the marginal propensities to consume and save (MPC and MPS)? (b) Graph the consumption function and the 45 degree line. (c) Solve for saving or dissaving at levels of disposable income 300, 900, and 1300. (d) Find the level of disposable income where savings equals zero.