Question

What is your marginal rate of consumption (MPC)? If your income increased $1,000 per month until retirement, how much would your spending on consumption goods increase?

Answer #1

This is a hypothetical situation. Based on how much of your increased income you spend on your consumption would decide this.

I personally use no more than 40% of the additional income I earn. When the income would be increased by $1000 per month, my spending on consumption goods would increase by 1000*0.4= $400.

Based on your experience, place your value of MPC in the above calculation and compute your tendency to increase the consumption for the increase in income.

In the past, how has your consumption changed as the amount of
your income increased and decreased over the years? How do you
supplement for periods of low-income (for example if you are not
working while you are in college)? Finally, compare your MPC now to
what you think your MPC would be once you graduate and get a
high-paying job. Do you think it will remain constant, increase, or
decrease? Why?

Suppose that my autonomous consumption=$35,000; disposable
income=$12,000; and MPC=0.82. Solve for my marginal propensity to
save.
Suppose that everyone in society has a MPC of 0.92. If the
government spends $40,000,000, how much total spending would this
create according to Keynes?
Suppose that I find $130 on the ground as I leave my office. I
decide to treat myself and spend $80 on a lobster dinner and save
the remaining $50. What is my MPC? Solve and then explain what...

If autonomous consumption is $1000, the MPC = 0.75, net taxes =
$500, investment spending = $800, and govt purchases = $500, and NX
= $0, what is equilibrium GDP?
Question 1 options:
$1,800
$1,925
$2,566.70
$7,200
$7,700
Question 2 (1 point)
The focus of the short-run macro model is on the role of
Question 2 options:
spending in explaining economic fluctuations
labor in explaining economic fluctuations
financial markets in explaining economic fluctuations
output in explaining economic fluctuations
resources in...

In 2013 Bill earned $55,000 gross income and rented an apt for
$1,000 per month. Given this is all the information you have, 25%
tax rate, no other deductions and a standard deduction of $5,000.
What are his total taxes due, his marginal rate, his average rate,
and how much was his monthly take home pay?

For utility maximization, consumers will purchase different
consumption bundles until their marginal utility per
dollar are equal. So, when the marginal utility of beef is 10
at price of $5 per lb and the marginal utility of chicken is 8 at
price of $3 per lb, will you purchase more beef or chicken? Explain
briefly about your decision.

If the consumption function is C = $400 billion + 0.8Y,
(a) What is the MPC?
(b) How large is autonomous C?
$ billion
(c) How much do consumers spend with incomes of $4 trillion?
$ billion
(d) How much do they save? Instructions: Enter your response
rounded to the nearest whole number.
$ billion

Aggregate Output/Income
Net Taxes
Planned Investment
Aggregate Consumption
Government Spending
1,000
200
200
680
200
1,100
200
200
760
200
1,200
200
200
840
200
1,300
200
200
920
200
1,400
200
200
1,000
200
1,500
200
200
1080
200
1,600
200
200
1,160
200
Please show calculation
a. Complete the table by
determining the aggregate expenditure, the unplanned inventory
change, savings and disposable income at all income
levels
b. Determine
the marginal propensity to consume (MPC) and marginal...

Assume that the consumption schedule in the US economy is given
by C= $20 billion + 0.8D
Where C is consumption in billion and D is disposible income (in
billion) . Answer the following
a) Obtain marginal propensity to consume (MPC) and marginal
propensity to save (MPS).
b) Obtain consumption, average propensity to consume (APC)
and marginal propensity to save (APS), when D
= $200 billion.
c) obtain the tax multiplier and spending multiplier.
d) Suppose a negative demand shock caused real...

You want to receive $5,000 per month in retirement. If you can
earn .75% per month and you expect to need the income for 25 years,
how much do you need to have in your account at retirement?
You want to receive $5,000 per month for the next 5 years. What
monthly rate would you need to earn if you only have $200,000 to
deposit?
You are saving for a new car and plan to put $3,000 per year in...

Assume your goal is to retire at age 65 and you estimate you
will live until age 90. Your income at age 30 is $50,000 and you
expect this to increase at a rate of 8% per year. The nominal rate
of return on your investment portfolio is 6% and you plan to save
15% of your income per year. The expected rate of inflation is
3%.
How much will your fund pay per year during your retirement?

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