Question

1; the government increases its spending by $1000 billion. if the marginal propensity to save is...

1; the government increases its spending by $1000 billion. if the marginal propensity to save is 0.2, what happens to the following: do they rise or fall and  by what amount

a public saving

b private saving

c national saving

d investment

e interest rate  

Homework Answers

Answer #2

answered by: anonymous
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
The government raises taxes by $100 billion. If the marginal propensity to consume is 0.6, what...
The government raises taxes by $100 billion. If the marginal propensity to consume is 0.6, what happens to the following? Do they rise or fall? By what amounts? a. Public saving b. Private saving c. National saving d. Investment
Consider a closed economy, where the marginal propensity to consume is 0:9. What would be the...
Consider a closed economy, where the marginal propensity to consume is 0:9. What would be the e§ect on private, public and national saving of a $10 million decrease in both taxes and government spending? Would the equilibrium real interest rate increase, decrease, or stay the same?
The response of investment spending to an increase in the government budget deficit is called Select...
The response of investment spending to an increase in the government budget deficit is called Select one: a. crowding out. b. income minus net taxes. c. private dissaving. d. expansionary investment. How will an increase in the government budget surplus as a result of lower government spending (with no change in net taxes) affect private saving in the economy? Select one: a. Private saving will decrease by less than the amount of increase in the budget surplus. b. Private saving...
PART 1 Suppose the government increases education spending by $30 billion. If the marginal propensity to...
PART 1 Suppose the government increases education spending by $30 billion. If the marginal propensity to consume is 0.75, how much will total spending increase? Instructions: Enter your response as a whole number. $_________ billion PART 2 NEWS WIRE FISCAL RESTRAINT Retailers Bracing for Spending Slowdown Retailers across the country are bracing for an anticipated slowdown in consumer spending. As of January 1, the Social Security payroll tax rate moved back up from 4.2 to 6.2 percent. That will reduce...
Assume the following values: Marginal Propensity to Consume b = 0.8; Autonomous Consumption a = 200;...
Assume the following values: Marginal Propensity to Consume b = 0.8; Autonomous Consumption a = 200; Investment Spending I = 250. There is no government spending. a) For a consumption function C = a + bY, what is the equilibrium value for income Y in the economy? (The value at which planned aggregate expenditure and planned output coincide.) b) What changes when Investment Spending increases to 300? When it drops to 225? c) What effect can you observe in the...
Consider the goods market equilibrium model (the saving-investment diagram). When the government increases its spending temporarily,...
Consider the goods market equilibrium model (the saving-investment diagram). When the government increases its spending temporarily, what would happen to the real interest rate and national saving in equilibrium? Explain using the saving-investment diagram.
If consumption increases from $500 billion to $575 billion and income increases from $600 billion to...
If consumption increases from $500 billion to $575 billion and income increases from $600 billion to $700 billion, the marginal propensity to save is: 0.2. There is not enough information to answer this question. 0.75. 0.25. 19. Which of the following is NOT a determinant of investment? the amount of existing capital goods technological innovations past stock and bond prices business expectations
(Advanced analysis) In a private closed economy (a) the marginal propensity to save is 0.25, (b)...
(Advanced analysis) In a private closed economy (a) the marginal propensity to save is 0.25, (b) consumption equals income at $120 billion, and (c) the level of investment is $40 billion. What is the equilibrium level of income? I know the answer is 280 billion but how do I get there?
28- If autonomous spending rises, the expenditure equilibrium will rise by the increase in autonomous spending....
28- If autonomous spending rises, the expenditure equilibrium will rise by the increase in autonomous spending. the expenditure equilibrium will increase by the level of GDP times the expenditure multiplier. the expenditure equilibrium will fall by the increase in autonomous spending. the expenditure equilibrium will rise by the increase in autonomous spending multiplied by the expenditure multiplier. 31- An example of fiscal policy is an increase in autonomous spending by consumers. an increase in social security spending by the elderly....
The government is running a budget balance of zero when it decides to increase education spending...
The government is running a budget balance of zero when it decides to increase education spending by $100 billion and finance the spending by selling bonds. Private sector’s investment spending will ___C___. The ___D___ in government borrowing crowded out in private investment spending. This is called the crowding-out effect. Fill C and D. fall; decrease fall; increase rise; decrease rise; increase