Investment = 450 Consumption = 700 + 0.7Yd Government expenditure= 500 Taxes = 350 Export = 400 Import = 300 (All values are in RM million) Based on the information, answer the following question Find the value of marginal propensity to consume (MPC) & marginal propensity to save (MPS). Derive the saving function Calculate the equilibrium income level using the aggregate expenditure – aggregate supply approach

Investment = 450 Consumption = 700 + 0.7Yd Government expenditure= 500 Taxes = 350 Export = 400 Import = 300 (All values are in RM million) Based on the information, answer the following question Find the value of marginal propensity to consume (MPC) & marginal propensity to save (MPS). Derive the saving function Calculate the equilibrium income level using the aggregate expenditure – aggregate supply approach

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter19: The Keynesian Model In Action

Section: Chapter Questions

Problem 5SQP

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YOU ARE REQUIRED TO SHOW A CALCULATION METHOD Based on the information given on a hypothetical economy, answer the following questions. Saving function ( S) = -150 + 0.25Yd Investment (I) = 100 Government Expenditure (G) = 200 Taxes (T) = 100 i) Find value MPS and MPC ii) Calculate the national income equilibrium using AD=AS approach. iii) Derive the consumption function Note: please clear answer no Whois one i,ii nd iii
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Given the following model of an Economy as follows:- (10 marks) C = 50 + 0.7 Yd (Yd = Y-T) (Consumption & Expend) I = 100 (Investment Expend) X = 20 (Exports ) M = 10 – 0.27 (Imports) T=25 interepret the consumption Function i) Determine Equilibrium level of National Income ii) Consumption level at Equilibrium level of Income iii) Total import at equilibrium Income
Construct a consumption function from the data given here and determine the MPC. Given the consumption function in the above question, what is the relationship between disposable income and consumption? Is it direct or indirect and then explain what it means.
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Assume the following model of the expenditure sector: S=C+I+G+Nx TR=100 C=420+(4/5)YD I=160 G=180 Nx=-40 YD=Y+TR-TA TA=(1/6)Y If the government would like to increase the equilibrium level of output (Y) to the full employment level Y*=2,700, by how much should government purchases (G) be changed?
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