If consumers decide to increase saving, then C decreases, r decreases, I increases, and Y:

Q: What determines the slope of a consumption function?

A: Consumption, represented as expenditure for utility acquirement. Consumption involves the ultimate…

Q: why is there a trade off between amount of consumption that people can enjoy today and the amount of…

A: Scarcity, limited resources and unlimited wants are the reason for the tradeoffs between current and…

Q: If saving dropped sharply in the economy, what would likely happen to investment? Why?

A: The savings and investment are two important factors that are determined based on the rate of…

Q: Consumption function C = 32 +0.8 Y. a. Create saving function b. How much is consumption when…

A: The aggregates are part of macroeconomics. The C is Consumption, S is Savings and Y is Income. The…

Q: State 3 characteristic of the consumption function ?

A: Consumption function represents the functional relationship between total consumption and gross…

Q: What is the level of saving if: The MPC equals .9, disposable income rises from $ 800 to $ 900, and…

A: The marginal propensity of consumption and savings is the proportion of the disposable income that…

Q: Given the following table. Income (RM million) Consumption (RM million 100 100 150 200 200 300 250…

A: Hi, thanks for the question. Since you have asked multiple parts, we will answer only the first…

Q: Is it possible for total saving to fall when people become more thirfty?

A: Answer: The paradox of Thrift was introduced by J.M.Keynes, this theory explains when individuals…

Q: Find the disposable income when the savings are  $190 and the consumption is $210!

A: Given information is: Savings: $190 Consumption: $210 To find: disposable income

Q: erest rate b) A decrease in investm

A: The IS curve depicts all level sets of output and interest rates at which total investment in turn…

Q: Assume an intertemporal budget constraint that shows how consumption can be traded off between two…

A: We are going to use the concept of present value of the extra amount to be received in the next…

Q: Exogenous changes in spending refer to changes in planned spending: O related to changes in output…

A: The aggregate demand curve shows the inverse relationship between the price level and the total…

Q: A friend asks you to explain the difference between saving and investment. Explain the difference.

A: The individuals and households earn income from various sources which is then used by them for…

Q: Is it irrational to spend all your current disposable income

A: Answer - Disposible income :- It is the income an individual have after paying the taxes . The…

Q: Which of the following two effects of a decrease in the tax rate on saving would raise savings?…

A: Answer - Need to find - Which of the following two effects of a decrease in the tax rate on saving…

Q: Other things being constant, what will be the effect of each of the following on consumption and…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Assume you have $2,000 autonomous consumption and given $10,000 disposable income did not allow you…

A: Given autonomous consumption = 2000 Disposable income = 10000 At 10000, savings equal to zero The…

Q: Why does investment vary more than consumption from year to year?

A: Consumption and investment (savings) are the two variables or elements of an individual’s income. An…

Q: What happens to consumption if the student is constrained for somereason and cannot borrow today?

A: If the income of the student is very low initially, then according to the model of neoclassical…

Q: Why is savings equal to investment

A: Saving is the portion is income that is not used in consumption and thus does not include in income…

Q: Is the purchase of equipment or machinery a part of consumption or investment? Why?

A: The concept of allocation of money with having an expectation in the future of a positive return or…

Q: Describe the Investment Decision for a Simple Investment?

A: A simple investment can be made on the basis of various methods like the payback period, return on…

Q: True/False and Explain An increase in savings implies a decrease in consumption and therefore a…

A: The above given statement is explained as follows:

Q: What is the break even investment

A: The relationship that exists between fixed costs, variable costs, and returns can be studied by…

Q: Anna cares about her present and future consumption. Anna prefers consumption plan A to consumption…

A: Answer -

Q: Please explain in three well-structured paragraphs the impact of a change in the savings rate on the…

A: Saving is the process of setting aside a portion of current income for future use, or the flow of…

Q: If Evan's income is reduced to zero after he loses his job, his consumption will be ________ and his…

A: Saving: Saving is the part of income that is not spent. Basically it is the amount that a person…

Q: Consider the household model that you have seen in class but now assume that the goal of the…

A: Consumption: It refers to the amount of goods and services people will consume. The more the…

Q: If Evan's income is reduced to zero after he loses his job, his consumption will be and his saving…

A: Consumption function is a sum of induced consumption and autonomous consumption. Autonomous…

Q: The consumption schedule directly relates Multiple Choice consumption to saving. consumption to the…

A: The consumption schedule show the relationship between the consumption at each level of disposable…

Q: Empirical evidence suggests that many consumers tend to spend all of their current disposable income…

A: Yes, this is irrational that many consumers tend to spend all of their current disposable income…

Q: (c) In general, if consumption is given by the function C = A + MPC*DI, then saving will obey the…

A: Marginal propensity to consume (MPC) is the change consumption spending (C) by consumer due to the…

Q: With the help of consumption function C=10+0.5Y, calculate savings at an income level of $500

A: The consumer spending depends upon various factors such as income level, interest rate, age,…

Q: How does savings change with changes in y2? Provide some intuition behind this result.

A: The saving function shows the positive relationship between the saving rate and the output of the…

Q: Find the saving when the income is 50 and consumption is 60

A: Actually in the question Income level is = 50 Consumption is stated as = 60 Savings needed = ?

Q: Describe the simple investment?

A: Investment refers to buying financial assets like shares and bonds to earn interest rates. Rate of…

Q: If current and future consumption are both normal goods, a decrease in the interest rate will…

A: A decrease in interest rate will reduce future consumption and increase current consumption.

Q: If the value of MPC is 0.25 Find the value of MPS.

A: Given data: MPC is 0.25

Q: What is the relationship between the MPC and the multiplier?

A: The Keynesian consumption function shows the relationship between the consumption expenditure and…

Q: private saving in the short run? c. Repeat the above exercises for the medium run. Please answer…

A: a) As Consumers decrease their confidence. They start consuming less and saving more The MPC" will…

Q: If the consumption function is C = 100 + 0.8Yd, T= 200 and Y = 800, what is savings?

A: Consumption function gives the relationship between disposable income and consumption. Consumption…

Q: In the long run, what happens to consumption in the economy when people are saving less?

A: Saving is vital for economic growth. As saving acts as supply of loanable funds. The funds that are…

Q: if the value of MPC is 0.29 Find the value of MPS

A: Generally in the given question MPC is given as = 0.29 So the value of MPS is needed = ?

Public Saving

Public saving deals with the amount which has been in excess after meeting all the obligatory expenses and investment of the government. Taxes are collected by the government to meet its day-to-day expenditures. The obligatory expenses include all those expenses which are mandatory for the government. It cannot be avoided as it is inevitable.