Question

a) If the savings rate of country A is higher than that of country B, while...

a) If the savings rate of country A is higher than that of country B, while all other factors are fixed, public

the effect of an increase in the same amount of expenditure on National Income (Y)

explain that there will be more in the which country, based on the multiplier formula.

b)In an economy where the marginal investment trend (MPI=A) is 0.10, consumers believe that the increase in their income

if it tends to consume half, a decrease in national income (y) of 40TL in autonomous investments (I0))

calculate how much change (increase/decrease) will result.

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
state and explain the four principles of consumption function by keynes b) given the following information...
state and explain the four principles of consumption function by keynes b) given the following information on a small closed economy C=1000-0.75Yd,Yd= disposable income I =100 G=200 Y=160 i) solve the goods market equilibrium (y,c and Yd); ii) what is the value of marginal propensity to consume iii) find the multiplier at the level of autonomous spending iv) what will be the increase in national income if investment increases by 50
Tattooine is a developing country situated in a remote region of Eastern Europe. It is the...
Tattooine is a developing country situated in a remote region of Eastern Europe. It is the largest producer of marsh gas in the world and is heavily dependent on its exports of gas to the rest of the world. Very much a state run-economy with high welfare benefits, it imports much of what it requires for its economy, lacking in natural resources, Its main growth indicators in 2013 are made up of autonomous consumption $30, investment $10, government expenditure $30,...
Suppose the government raises its revenue by a net tax of 20 percent on income, t...
Suppose the government raises its revenue by a net tax of 20 percent on income, t = 0.2, the marginal propensity to consume out of disposable income is 0.75, the marginal propensity to import is 0.15, and the government has an outstanding public debt of 1,100. In addition, the autonomous expenditure in households, business and foreign sectors (C + I + X - IM) is 400 and government expenditure is 400. Note: Keep as much precision as possible during your...
Assume the following economy: Autonomous Consumption = £10,000; Marginal Propensity to Consume = 0.8; Business Investment...
Assume the following economy: Autonomous Consumption = £10,000; Marginal Propensity to Consume = 0.8; Business Investment = £30,000 A. Find the equilibrium size of income Y and the size of the Multiplier of Business Investment (hint: to find the Multiplier increase investment by 10,000) (5%) B. Assume now that a government sector is introduced, while business investment is still £30,000. Government spending injects £50,000 into the economy. However, in order to finance its expenditure the government levies an income tax...
Imagine an economy where an additional injection of $10 billion in export sales results in national...
Imagine an economy where an additional injection of $10 billion in export sales results in national income increasing by $25 billion. There is a marginal propensity to save of 0.19 and a marginal propensity to tax of 0.18. What is the marginal propensity to import? Imagine an economy where: Autonomous expenditure is $40, equilibrium national income is $100, full employment output is $150, the marginal propensity to consume is 0.6, the size of the multiplier is 2.5 What is the...
In A country the consumption function is: C (Y) = 5 + 0.75 Y The investments...
In A country the consumption function is: C (Y) = 5 + 0.75 Y The investments are I = 4; full employment income is YV = 40. a) How high must government expenditure be for full employment to be achieved? b) How high would government transfers to A-land citizens have to be to achieve the same goal? (Note: a transfer is like a negative tax, -T) c) Why is it that the state expenditure is higher for b) than for...
1.Which of the following is a true statement about the multiplier? * The multiplier effect does...
1.Which of the following is a true statement about the multiplier? * The multiplier effect does not occur when autonomous expenditures decrease The multiplier is a value between zero and one The smaller the MPC, the larger the multiplier The multiplier rises as the MPC rises 2.According to the Keynesian model of the macroeconomic, the most effective means for closing a recessionary gap is * Decrease in marginal tax rates which shift SRAS Increases in government spending which shift AD...
Honduras is a small open economy (an open economy is an economy that trades with other...
Honduras is a small open economy (an open economy is an economy that trades with other countries). Suppose Honduras imposes a strict limit on the number of imports entering Honduras. As a result in the fall of imports the ________ will ________ and equilibrium output will ________. Group of answer choices: - 45-degree line; shift downward; increase - 45-degree line; shift downward; decrease - 45-degree line; shift upward; increase - 45-degree line; shift upward; decrease - planned expenditure curve (E);...
Suppose the following aggregate expenditure model describes the US economy: C = 1 + (8/9)Yd T...
Suppose the following aggregate expenditure model describes the US economy: C = 1 + (8/9)Yd T = (1/4)Y I = 2 G = 4 X = 3 IM = (1/3)Y where C is consumption, Yd is disposable income, T is taxes, Y is national income, I is investment, G is government spending, X is exports, and IM is imports, all in trillions $US. (a) Derive a numerical expression for aggregate expenditure (AE) as a function of Y. Calculate the equilibrium...
22. The crowding out effect is zero if A) the LM-curve is horizontal B) the LM-curve...
22. The crowding out effect is zero if A) the LM-curve is horizontal B) the LM-curve is vertical C) the Fed conducts open market sales following fiscal expansion D) income is stimulated via a tax cut rather than an increase in government spending E) none of the above 23. Crowding out occurs when A) an increase in defense spending causes a decrease in consumption B) expansionary monetary policy fails to stimulate economic growth C) expansionary fiscal policy causes interest rates...