Question

Consider the following data ( in billions of dollars): Year Real DI Real C Real Wealth...

Consider the following data ( in billions of dollars): Year Real DI Real C Real Wealth 0 700 693 75 1 720 712 77 2 760 746 77 Besides what is listed in the data, no variable that could affect real consumption changes over the time period of this problem. Note : assume that the economy’s MPC does not change over this time period. a.) Solve for the economy’s MPC ( show your work). b.) Place the 3 ( Real DI, Real C ) points ( one corresponding to each year) on a graph, drawing as many different consumption functions as you need ( i.e., each point lies on one consumption function, but any consumption function may contain more than one of the points). Label the points by the year. Don’t worry about drawing the functions to scale or about solving for the exact formulas.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

MPC shows the extra unit consumed with a % rise in the disposable income of a person. The solution to the question is given below:

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
2. Use the following consumption function data to answer the questions next... Keynesian Consumption Function (billions...
2. Use the following consumption function data to answer the questions next... Keynesian Consumption Function (billions of dollars per year) Real disposable income Consumption Saving MPC MPS $100 $150 $ 200 200 300 250 400 300 500 350 a. Calculate the saving schedule. b. Determine the marginal propensities to consume (MPC) and save (MPS). c. Determine the break-even income. d. What is the relationship between the MPC and the MPS? Tucker, Irvin B.. Macroeconomics for Today (Page 231). South-Western College...
The accompanying table shows data on nominal GDP (in billions of dollars), real GDP (in billions...
The accompanying table shows data on nominal GDP (in billions of dollars), real GDP (in billions of 2005 dollars), and population (in thousands) of the United States in 1960, 1970, 1980, 1990, 2000, and 2010. The U.S. price level rose consistently over the period 1960–2010. Year Nominal GDP (billions of dollars) Real GDP (billions of 2005 dollars) Population (thousands) 1960 $526.4 $2,828.5 180,760 1970 1,038.5 4,266.3 205,089 1980 2,788.1 5,834.0 227,726 1990 5,800.5 8,027.1 250,181 2000 9,951.5 11,216.4 282,418 2010...
Part 1 Consider the table below. All data are for 2004 and are in billions of...
Part 1 Consider the table below. All data are for 2004 and are in billions of dollars, except the CPI, which is a percentage. Capital Consumption Allowance $ 1,435.3 Billion Consumer Spending $ 8,214.3 Billion Corporate Income Taxes $ 360.1 Billion CPI (2004) 105.0 Dividends $ 200.3 Billion Exports $ 1,173.8 Billion Factor Income Payments made to Foreign Entities $ 361.7 Billion Factor Income Receipts from Foreign Entities $ 415.4 Billion Government Spending $ 2,215.9 Billion Gross Private Domestic Investment...
Data For Tasks 1-8, consider the following data: 7.2, 1.2, 1.8, 2.8, 18, -1.9, -0.1, -1.5,...
Data For Tasks 1-8, consider the following data: 7.2, 1.2, 1.8, 2.8, 18, -1.9, -0.1, -1.5, 13.0, 3.2, -1.1, 7.0, 0.5, 3.9, 2.1, 4.1, 6.5 In Tasks 1-8 you are asked to conduct some computations regarding this data. The computation should be carried out manually. All the steps that go into the computation should be presented and explained. (You may use R in order to verify your computation, but not as a substitute for conducting the manual computations.) A Random...
GoodClothes and MIS: Case from struggle to revamp Headquartered in Dubai, GoodClothes is a highly successful...
GoodClothes and MIS: Case from struggle to revamp Headquartered in Dubai, GoodClothes is a highly successful department retailer offering completely designed casual clothing and accessories. The company operates 10 stores in all seven emirates and 1 store in Al Ain. The company owns 6 stores and franchises 5. For some time, marketing managers targeted population between the ages 40 and 60 who like loose, comfortable clothes. Then, management was tempted to stock its stores with clothes for a younger population...
Using the model proposed by Lafley and Charan, analyze how Apigee was able to drive innovation....
Using the model proposed by Lafley and Charan, analyze how Apigee was able to drive innovation. case:    W17400 APIGEE: PEOPLE MANAGEMENT PRACTICES AND THE CHALLENGE OF GROWTH Ranjeet Nambudiri, S. Ramnarayan, and Catherine Xavier wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT