Explain the relationship among household disposable

Assignment Help Macroeconomics
Reference no: EM13253363

Explain the relationship among household disposable income, consumption, and savings. What is Marginal Propensity to Consume (MPC) and what does an MPC of 0.9 tell us about consumption and saving? Use an example to explain MPC.

Explain the following statement: "Changes in disposable income lead to movements along the consumption function while changes in wealth lead to a shift of the consumption function." Use examples to illustrate your response.

What impact would you expect each of the following events to have on business cycles? Label each as a demand-side or supply-side shock.

  • Defense production increases due to the imminent threat of war
  • Net exports decline due to a deep recession in Europe
  • A sharp increase in technology innovation leads to significant productivity growth

What economic policy changes might you expect in response to each of these events?

Explain the following statement: Any deviation from planned output or planned expenditures (Consumption + Investment) will throw the economy into disequilibrium. To illustrate your explanation, provide an example of how actual output might deviate from planned output and how actual expenditures might deviate from planned expenditures. List any economic reactions might you expect in the examples you provide.

Reference no: EM13253363

Questions Cloud

What is the voltage across each capacitor : Three capacitors, C1, C2 = 2C1 and C3 = 3C1 are connected in parallel to a voltage source of value V. What is the voltage across each capacitor when all three switches are closed
Does it matter where you are in the project timeline : So how will you as the project manager use this information to ensure project success at completion? Will you be successful? What might get in your way? Does it matter where you are in the project timeline?
Determine the frequencies of aliasing noise : given analog signal : x(t)=8cos(6,000pi)+5cos(14,000pit) t>=0 sampled at rate 12,000 Hz a) sketch the spectorum of the orignal signal and the sampled signal from 0 KHz and 25 KHz.
How would you expect this announcement to affect the value : All other factors held constant, what would be the effect on the demand for money (M1) of each of the following situations. Explain the rationale behind your responses.
Explain the relationship among household disposable : Explain the following statement: "Changes in disposable income lead to movements along the consumption function while changes in wealth lead to a shift of the consumption function." Use examples to illustrate your response.
The zinc electrode immersed in a solution of zinc sulfate : Consider a voltaic cell which has a copper electrode immersed in a solution of copper (II) sulfate and a zinc electrode immersed in a solution of zinc sulfate. determine Eocell. If the concentration of zinc sulfate is 10 times greater than the con..
Explain the use of material requirements planning : Explain the use of "Material Requirements Planning" concepts in manufacturing and Service organizations.
What economic policy changes might you expect : Three months ago you purchased, at par, a $100,000 bond with a stated interest rate of 5%. Today, the Federal Reserve announced
Calculate the equivalent series impedance of the transformer : The nameplate on a 25-MVA, 60-Hz single-phase transformer indicates that it has a voltage rating of 8.0-kV:78-kV. A short-circuit test from the high-voltage side (low-voltage winding short circuited) gives readings of 4.53 kV, 321 A, and 77.5 kW.

Reviews

Write a Review

Macroeconomics Questions & Answers

  The difference between total demand and domestic demand

Much of the demand for U.S. agricultural output has come from other countries U.S. farmers are concerned about this drop in export demand.

  Fact consistent with our discussion of specific investments

why might a parent company like McDonald s or Hilton choose to franchise its local outlets rather than own them and staff them with employees In many smaller cities all McDonald's outlets are owned by the same franchisee.

  Terms of trade and calculate the gains from trade

Answer the next three questions on the basis of the following production possibilies data for Francia and Galacia. All data are in tons.

  Illustrate what did the usa do

Illustrate what did the USA do like other countries as well after the first oil price shock.

  Describe the optimal method for procuring a modest number

Describe the optimal method for procuring a modest number of standardized inputs that are sold by many firms in the marketplace.

  Graphing the indifference curves for given preferences

Draw a set of indifference curves for Jones, and second set for Smith, with alcoholic drinks on vertical axis and non-alcoholic on the horizontal axis.

  Determine special but convenient case of linear demand

The demand schedule (or demand function or curve) for a good shows the total quantities (Q) that buyers are willing and able to buy at various prices (P) in some period of time. For example, here is a demand function illustrating the very special ..

  As we know about the own-price elasticity

As we know about the own-price elasticity for good x.

  Discussion centers on how person or consumers

The discussion centers on how person or consumers would react during a period when a country's GDP growth rates.

  Change in work incentive and work

Suppose in country Triniland employers are required to pay overtime at 50% above the normal wage rate for workers who work beyond 8 hours a day.

  At what point does her budget constraint kink

Sam arrived on campus at the beginning of the academic year with $480 to spend on textbooks and CDs. The price of a textbook is uniformly $80 and the price of a CD is always $20. Her parents made a deal with her - after Sam spends $240 of her own ..

  What is the effect on the value of checkable deposits

Suppose that any money lent by a bank is always deposited in a checkable deposit and that the reserve ratio is 10%. The Fed purchases $100 million in Treasury bills.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd