Okay, I have a test tomorrow and need someone really good at it to help me out. I'm having trouble with a bunch of questions and need someone to explain them to me. Plz...!!!!!! pm me
can't you guess, or is this for a grade?? (you can just guess a random answer, and click submit, and the answer will pop up, but you may be just as a graded online one???)
2. is D (16.67) because based on the chart the MPC (marginal propensity to consume) is .7 (MPC = change C/change output = 228-200/240-200). The multiplier is 1/MPS (marginal propensity to save) and because MPC + MPS = 1, MPS = .3 so the multiplier is 1/.3 = 3.33. So, 5 * 3.33 = 16.67
4. is A (increase by $75) based on the same explanation as above
5. is C (3.33 and 0.7) because each round of income increases is based on MPC. Of the initial 150 bil, the amount that is consumed is 105, and the rest is saved. Thus MPC is equal to 105/150 = .7. Then MPS = .3 and the multiplier, 1/MPS, is 3.33
Replies to: Ap Macroeconomics Help
I don't get how to get #2, 4, 5...and no1 that I know can explain it to me either. Please try!
4. is A (increase by $75) based on the same explanation as above
5. is C (3.33 and 0.7) because each round of income increases is based on MPC. Of the initial 150 bil, the amount that is consumed is 105, and the rest is saved. Thus MPC is equal to 105/150 = .7. Then MPS = .3 and the multiplier, 1/MPS, is 3.33
yeah #4 is b.
if all increase by 25 you get:
GDP = 35 and 45
Consumption = 30 and 40
It still is 5/10 for MPC
...
I totally forgot about MPC / Multiplier when doing these problems...silly me