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Assume that Carl and Wanda each make $40,000. Each was given a raise of $4,000. Carl's spending increased from $40,000 to $43,000. Wanda's savings increased from $1,000 to $2,000.
1. Carl lives in the Macro Islands. What is Carl's MPC? Wanda lives in the Micro Islands. What is Wanda's MPS?
2. When businesses in the Macro Islands increased investment by $30 million to attract tourists, GDP increased by $300 million. Calculate the MPC in the Macro Islands?
3. Assume taxes increase by $300 and government spending increases by $300. The marginal propensity to consume is 0.75. Calculate the total change GDP.
4. If equilibrium output rises by a total of $400 billion in response to an increase in government spending of $80 billion, what is the marginal propensity to consume?
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Explain how this investment capital is transformed into fixed capital goods, new technology, and cost reduction using new methods of production. Also, explain how interest rates impact the availability of investment capital.
financial statements the davidson corporations balance sheet and income statement are provided here. davidson
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(a) If the family own no other assets than this house, what is the expected value of their asset? (b) If the family had $25,000 sitting in a FDIC insured savings account, what would the expected value of their assets be? (c) If this family was of..
Suppose a frost kills a large portion of an orange crop, with a resulting higher price of oranges. It has been said that such an increase in price benefits no one since it cannot elicit a supply response; the higher price, it is said, simply "line..
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