Illustrate what would their new estimate of the mpc

Assignment Help Business Economics

Reference no: EM1348400

Suppose economists observe that an increase in government spending of $10 billion raises the total demand for goods and services by $30 billion.

a. If these economists ignore the possibility of crowding out, what would they estimate the marginal propensity to consume (MPC) to be?

b. Now suppose the economists allow for crowding out. Illustrate what would their new estimate of the MPC be larger or smaller than their initial one?

Reference no: EM1348400

Questions Cloud

Fixed versus fixed cost behavior : Complete the proceeding table by filling out the missing amounts for the levels of activity shown in the first row of the table. Round all cost per unit figures to the nearest whole penny.

Review the logic used to develop brake systems : Analyse the operational characteristics of the current system / component available in the market and future systems yet to come into production. Analyse the effect of the system on the environment and its sustainability.

Is there a difference between good stress and bad stress : Excessive stress is associated with various negative health outcomes, including heart disease and obesity, but some people appear to thrive in stressful environments.

The cost-cutting measures : Based on the cost-cutting measures you identified, state how much money every year you anticipate saving if you implemented every measure.

Illustrate what would their new estimate of the mpc : Now suppose the economists allow for crowding out. Illustrate what would their new estimate of the MPC be larger or smaller than their initial one.

Employee wellness programs and individual stress : Show your understanding of the employee wellness program and explain why some organizations have accepted the responsibility for promoting employee

Joint cost and utilization of scarce resources : The Dallas plant of Oscar Chemical processes talphazine into zetazine and gammazine. A batch consists of 20,000 gallons of talphazine, costing $11,000.

Illustrate what would be appropriate elasticity to compute : The price of twinkies fell from 0.80 to 0.70.As a result,the quantity demanded of Ho-Ho's decrease from 120 to 100. Illustrate what would be the appropriate elasticity to compute. compute this elasticity.

Determine profitability ratios : Based on your analysis, determine which corporation is better able to pay current liabilities. Describe your rationale.

User Account

All Pages