Answer the following questions about marginal propensity to consume and the multiplier. First provide the correct equation and then show your work to arrive at the answer:
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What is the marginal propensity to consume when consumption changes from 7 to 6 and disposable income changes from 5 to 3?
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If disposable personal income is 10 and consumption is 12, what is personal savings? What does this mean?
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What is the multiplier when the change in equilibrium level of real GDP in the aggregate expenditures model is 9, and change in autonomous aggregate expenditures is 3?
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What is the multiplier when the marginal propensity to save is 1/3?
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What would happen to the marginal propensity to save when a tax cut was enacted causing the multiplier to change to 5?
The following criteria will be used to grade the papers:
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Correct equations are used and shown
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Explanations are correct
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Calculations are correct.
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Answers are correct