Cent Blank
Consider a closed, private economy in which consumption is equal to $500 billion when Real GDP is zero and inc
Consider a closed, private economy in which consumption is equal to $500 billion when Real GDP is zero and increases by 75 cents when disposable income increases by $1. Investment is constant for all levels of Real GDP and equal to $200 billion.
In this economy, the marginal propensity to save (MPS) is blank?
Can anyone help explain this solution. I am dumbfounded with this question
C=500billions
C=Ae+MPC*Yd
MPC=1-MPS
Yd=Y-T
Yd – disposable income
Y – GDP
T – Taxes
C – consumption
Let’s assume that taxes=0
So Yd=Y
Y=0
500’000’000’000=Ae+MPC*0
Ae=500’000’000’000 (autonomous expenditures)
C=500’000’000’000 +MPC*Yd
Y=0.75
Y=C+I+G (for closed economy)
Let’s assume that there is no government
Y=C+I
I=200’000’000’000
Y=C+200’000’000’000
Question – How real GDP can be zero ? (It states “…Real GDP is zero…”) – there is contradiction, since we have given investments=200bill.
Conclusion: There is error in question or book.
—— —— —— —— ——
But I would answer that MPS=0.25 and MPC=0.75 because if disposable income is increased by $1 then 0.75 is consumed and automatically rest is saved so 1-0.75=0.25 and MPS=0.25
—— —— —— —— ——
50 Cent ft. Eminem, Blank Jones, Rani, Akon & Lloyd Banks – Love me
|
|
BLANK & JONES / DJ’S , FANS & FREAKS (REMIXES) COSIMIC GATE / MARCO V REMIXES… |
|
|
Dj’s Fans & Freaks $9.25 Blank & Jones are one of the biggest dance acts in Germany. They are also set to score their biggest hit to date over here with ‘DJs, Fans & Freaks’ taking clubland by storm. Cosmic Gate provide the main mix of this outstanding single…. |
|
|
BLANK & JONES DJs Fans & Freaks 12 … |
|
|
33 cents!, Blank Card 5 x 7 inch premium quality folded paper greeting card. Find cards for everyone on your list at Greeting Card Universe. cards are always more memorable when they are sent the old-fashioned way. Allow Greeting Card Universe to handle all your card needs this year. This paper card includes the following themes: photo, image, and art. Greeting Card Universe has the biggest selection of cards to celebr… |
|
|
Beverly Turner Photography – 33 cents, Old Gas Station – Greeting Cards-12 Greeting Cards with envelopes $15.95 33 cents, Old Gas Station Greeting Card is measuring 5.5w x 5.5h. Greeting Cards are sold in sets of 6 or 12. Give these fun cards to your friends and family as gift cards, thank you notes, invitations or for any other occasion. Greeting Cards are blank inside and come with white envelopes…. |
|
|
Beverly Turner Photography – 33 cents, Old Gas Station – Greeting Cards-6 Greeting Cards with envelopes $10.49 33 cents, Old Gas Station Greeting Card is measuring 5.5w x 5.5h. Greeting Cards are sold in sets of 6 or 12. Give these fun cards to your friends and family as gift cards, thank you notes, invitations or for any other occasion. Greeting Cards are blank inside and come with white envelopes…. |
|
|
HP Q5949X Toner Cartridge $145.99 Yield: 6,000 pages per cartridge – Black Warranty: 1 Year Limited. Brand Compatibility: HP. Page Yield: 6,000 pages. Remanufactured: No. Print up to 3X more pages with high yield cartridges . Original HP outstanding printing with every page . Save time and improve productivity with trouble-free operation… |
|
|
New-Learning Resources LER2283 – Dollars and Cents Pocket Chart, 26 x 30 – LRNLER2283 Great for centers focusing on money skills. Teaches coin and bill recognition, and reinforces addition, subtraction, making change and written representations of money values. Students pretend to shop with store item cards and piggy bank cards. Includes 169 double-sided, write-on/wipe-off cards with vocabulary words, numbers and symbols. Five display pockets and three convenient storage pockets ke… |
|
|
Belkin Components SCSI External Cable DB68M/CENT50M HD-68 M 50 pin Centronics M 12 Feet $113.83 This is a SCSI III cable with thumbscrews for interconnecting Micro DB68 male interfaces and Centronics 50 male interfaces…. |
|
|
Rabbit Skins Toddler 5.5 oz. Long-Sleeve T-Shirt – WHITE – 2T 100% cotton jersey; ribbed crew neck and cuffs; taped shoulder-to-shoulder; double-needle hemmed bottom; White is sewn with 100% cotton thread; Ash is 99% cotton, 1% polyester; Heather is 90% cotton, 10% polyester;… |