What will be the mpc of disposable income

Assignment Help Econometrics

Reference no: EM13221979

if the MPC of disposable income is 0.6, and the marginal propensity to invest is 0.2, and the Y multiplier is 5, then if the government reduces taxes by 150, the public will spend 0.6 * 150 , or 90, and Y will increase by 450.

Why don't we say that the public will spend ((0.6+0.2) * 150), or 120, and Y will increase by 600. After all, when we talk about domestic investment, it's not only government that invests in the economy - people do too, right?

Reference no: EM13221979

Questions Cloud

Compute the price elasticity of demand for paint : Suppose you are a painter, and the price of a gallon of paint increases from $3.00 a gallon to $3.50 a gallon. Your usage of paint drops from 35 gallons a month to 20 gallons a month. Perform the following: 1.Compute the price elasticity of demand ..

What marginal utility value does total utility reach max num : Using the following information, calculate total utility and marginal utility. a. Plot the total utility curve. b. Plot marginal utility directly below total utility. c. At what marginal utility value does total utility reach a maximum Number of unit..

Analyze effect of regulation on the allocation of resources : (a) What is the level of price, output, and amount of profit for an unregulated monopolist (b) Using the data in the table, what are the price, output, and profit for a regulated monopolist that sets price equal to marginal cost compared with an u..

Determine linear combination of chickens and potatoes : If she apportions some resources to each, then she can produce any linear combination of chickens and potatoes that lies between those extreme points. If James devotes all his resources to growing potatoes, he can raise 80 pounds of potatoes per y..

What will be the mpc of disposable income : Why don't we say that the public will spend ((0.6+0.2) * 150), or 120, and Y will increase by 600. After all, when we talk about domestic investment, it's not only government that invests in the economy - people do too, right

How much will he receive for the crop at that time : A grower estimates that if he picks his apple crop now, he will obtain 1000 boxes of apples, which he can sell at $3 per box. However, he thinks his crop will increase by 120 boxes of apples for each week he delays picking, but that the price will..

Explain the heat of combustion per gram of quinone : The temperature of the calorimeter increases from 24.56 *C to 32.01 *C. What is the heat of combustion per gram of quinone and per mole of quinone?

What does tax agreement suggest about possibility of crowdin : President Obama recently agreed in December with Republicans in Congress to extend existing tax cuts that were scheduled to expire December 31 and to create new tax cuts as well. Meanwhile, recent reports suggest that the economy may expand more.

Explain the density of toluene at the temperature : is added to the flask so that the total volume of solid and liquid together is 54.00 . The solid and toluene together weigh 58.58 . The density of toluene at the temperature of the experiment is 0.864

User Account

All Pages