Whenever real GDP exceeds planned aggregate spending: households decrease consumption, decreasing disposable income. firms increase production, increasing real GDP. firms reduce produt tion, reducing real GDP. Ohouseholds increase consumption, increasing disposable income.
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- The MPC is Group of answer choices the change in consumption divided by the change in income. consumption divided by income. the change in saving divided by the change in income. the change in consumption divided by the change in saving.A recessionary gap: Would cause a depletion of inventories. Would occur if total output were less that aggregate demand. Is the amount by which aggregate expenditure falls short of full employment GDP. Is the amount by which total spending exceeds GDP.Which of the following will not cause an increase in equilibrium GDP? a) an increase in government expenditure on health care b) an increase in income tax rates c) an increase in exports to the EU d) an increase in domestic consumption expenditure
- The consumption schedule relates: consumption to saving. disposable income to domestic income. saving to the level of disposable income. consumption to the level of disposable income.In a closed economy, consumers spend $300 regardless of the level of income, and the marginal propensity to consume (MPC) is 0.75. Investment is equal to $200. The government spends $400 and collects $50 in taxes. The equilibrium level of GDP in this economy is $If the autonomous expenditure by the government increases by 7000 and the MPC is 0.2 find the level of new income in the economy
- The consumption expenditure and output of the country is 500 billion and 100 billion respectively. Calculate the average propensity to consume.If the multiplier in an economy is 5, a $20 billion increase in net exports will. make sure the answer is accurate.Group of answer choices decrease GDP by $100 billion. increase GDP by $20 billion. increase GDP by $100 billion. reduce GDP by $4 billion.Suppose that equilibrium output in a closed economy is 1,680, consumption 1,260 and investment is 120. The marginal tax rate is zero. The marginal propensity to consume out of national income is 0.75. The level of government expenditure (G) is 1260 120 300
- The marginal propensity to consume is: the amount of consumption at a specific level of income. the fraction of a change in income that is consumed or spent. a change in saving divided by a change in consumption. consumption times income.If economists forecast a decrease in aggregate expenditure, which of the following is likely to occur?GDP will rise. GDP will fall. Wages will rise. Inventories will fall.Suppose the marginal propensity to consume is 0.8, the marginal propensity to import is 0.2, and autonomous expenditure is 300. What is the equilibrium value of GDP? Answer: