Economics (Irwin Economics)
21st Edition
ISBN: 9781259723223
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 30.2, Problem 2QQ
To determine
Relation between saving and consumption.
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Students have asked these similar questions
The savings rate is
a. the difference between gross income and disposable income.
b. the ratio of personal income to taxes paid on income.
c. the percent reduction in taxes due to permitted deductions.
d. personal savings as a percentage of disposable income.
e. cash savings as a percentage of total net worth
Consider the two-period Neoclassical growth model seen in class. Let the utility function take the
logarithmic form U(C)=In C.
The saving schedule is drawn on the assumption that as income
increases,
Select one:
a.
saving will increase absolutely but decline as a percentage of income.
b.
saving will decline absolutely and as a percentage of income.
c. saving will increase absolutely and as a percentage of income.
d.
saving will increase absolutely but remain constant as a percentage
of income.
Chapter 30 Solutions
Economics (Irwin Economics)
Ch. 30.2 - Prob. 1QQCh. 30.2 - Prob. 2QQCh. 30.2 - Prob. 3QQCh. 30.2 - Prob. 4QQCh. 30.5 - Prob. 1QQCh. 30.5 - Prob. 2QQCh. 30.5 - Prob. 3QQCh. 30.5 - Prob. 4QQCh. 30 - Prob. 1DQCh. 30 - Prob. 2DQ
Ch. 30 - Prob. 3DQCh. 30 - Prob. 4DQCh. 30 - Prob. 5DQCh. 30 - Prob. 6DQCh. 30 - Prob. 7DQCh. 30 - Prob. 8DQCh. 30 - Prob. 9DQCh. 30 - Prob. 1RQCh. 30 - Prob. 2RQCh. 30 - Prob. 3RQCh. 30 - Prob. 4RQCh. 30 - Prob. 5RQCh. 30 - Prob. 6RQCh. 30 - Prob. 7RQCh. 30 - Prob. 8RQCh. 30 - Prob. 9RQCh. 30 - Prob. 1PCh. 30 - Prob. 2PCh. 30 - Prob. 3PCh. 30 - Prob. 4PCh. 30 - Prob. 5PCh. 30 - Prob. 6PCh. 30 - Prob. 7PCh. 30 - Prob. 8PCh. 30 - Prob. 9PCh. 30 - Prob. 10P
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- 1. a. Explain consumption and saving function by using numerical example and diagram.arrow_forwardWhich of the following isn't one of the eight determinates of the level of consumption? A. Disposable Income B. Keeping up with the Joneses C. The Wealth Effect D. Product Qualityarrow_forwardQuèstion 4 "As disposable income increases, consumption:" O And saving both increase. O Decreases and saving increases. O And saving both decrease. O Increases and saving decreases.arrow_forward
- Economics Which of the following situations represent saving? a) Mike borrows $8,000 from a bank and buys a truck for his personal use. b) John uses his $500 paycheck to buy stock in Microsoft. c) Austin borrows $9,000 from a bank to buy a truck to use in his lawn mowing business. d) Your roommate earns $2000 and spends itarrow_forwarda. either increase or decrease. b. increase. c. decrease. d. remain constant.arrow_forwardQuestion 4 Explain how does a decrease in the current income y affect the consumer's consumption-saving decision. In particular, explain: 1) How will current consumption c, future consumption c', and savings s change; 2) Are there any substitution effect or income effect. Make sure you draw two figures, one for the borrowers and one for the lenders.arrow_forward
- Consumption/Savings 1000 800 600 400 200 0 -200 Select one: 200 400 600 800 1000 1200 1400 1600 S Refer to the graph above to answer this question. What is the equation for the saving function? A. S=200+ 0.4Y. B. S=-200+ 0.6Y. X C. S-200+ 0.8Y. OD. S-200 +0.2Y. OE. S=200 - 0.2Y. Incomearrow_forwardThe future value of a dollar as the interest rate increases and the longer the money remains invested Select one: a. decreases; increases b. decreases; decreases c. increases; increases 21 d. increases; decreasesarrow_forwardHelp mearrow_forward
- This person earns $1000 of income today and $2000 income next year. Point C represents his consumption if he doesn't borrow or lend. Consumption Next Year The interest rate is 10%. Consumption Today Moving from C to A the person is saving money and earning interest. O Moving from A to C, the person is borrowing and paying interest. O Moving from C to B, the person is saving and earning interest. O Moving from C to B, the person is borrowing and paying interest.arrow_forwardWhich one of the following is NOT a possible relationship between income and spending Select one: a. Income equals the level of spending b. Spending is higher than income c. None is a relationship d. Income is higher than spendingarrow_forwardAt the equilibrium level of income it must be true that total Select one: a. product equals total output. b.income equals total spending. cincome equals total saving. d. output equals total inventory.arrow_forward
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