You are watching: If the marginal propensity to consume is 0.75
A marginal propensity to consume that 0.75 way that a consumer will increase real usage spending $75 for every $100 increase in real disposable income. Because a human being either consumes or saves real disposable income, the marginal propensity come save should be 0.25. We do not recognize what the typical propensity come consume is. It depends on the level of real disposable income.
Ignoring the government and also foreign sectors, over there is an unplanned to decrease in inventories that $100 exchange rate at the current level of real national earnings of $20 trillion. From this information, we understand that
Suppose autonomous consumption is $1 trillion, invest spending is $1.5 trillion, and the marginal propensity to consume is 0.75. Show the graph for the C + i curve. What is the equilibrium level of real GDP? define its meaning.
In the listed below figure, the C curve has a upright intercept at $1 trillion, denote autonomous usage spending. Invest spending is constant at $1.5 trillion, therefore the upright intercept for the C + ns curve is $2.5 trillion. Equilibrium real GDP is $10 trillion—where the C + ns curve intersects the 45-degree line. In ~ this point, planned expenditures exactly equates to real GDP. Further, saving equals investment ($1.5 trillion). Usage spending is $8.5 trillion.
What effect would taxation have actually on real usage spending when federal government spending is autonomous?
If the marginal propensity come consume (MPC) is 0.75 and also there is rise in planned investment spending the $1 trillion, then saving will
In the Keynesian model, a to decrease in real autonomous spending results in a an ext than proportional decrease in real Gross domestic Product (GDP) because
Refer come the over figure. If real Gross residential Product (GDP) is $6 trillion, then unplanned business inventories will
Refer come the above table. If actual GDP is $12 billion, full planned expenditures and also unplanned inventory changes are respectively
See more: " National Treasury Employees Union V. Von Raab, National Treasury Employees Union V