--%>
Assignment Help - homework help

Determine sizes of the MPC- the MPS and the multiplier

Refer to the table below in answering the questions which follow:

725_inflationary expenditure gap or recessionary expenditure gap.png

Suppose that investment, net exports and government expenditures do not modify with changes in real GDP, determine the sizes of the MPC, the MPS, and the multiplier?

 

 

E

Expert

Verified

MPC = .8 (= $40 billion/$50 billion); MPS = .2 (= 1 -.8); multiplier = 5 (= 1/.2).

   Related Questions in Finance Basics

  • Q : What is Working Capital and Revolving

    Working Capital and Revolving Fund: For legal base accounting purposes, fund categorization for funds employed to account for the transactions of self-supporting enterprises which render goods or services for a direct charge to the user that is genera

    		•
  • Q : Define the term floor Floor: The

    Floor: The Assembly or Senate chambers or the word employed to explain the location of a bill or the kind of session. Matters might be termed to as “on the floor”.

    		•
  • Q : Fin 235 Personal Finance Homework Fin

    Fin 235 Personal Finance Homework Chapter 8: Problems: 1, 3, 5, 7 1.   Most home insurance policies cover jewelry for $1,000 and silverware for $2,500 unless items are covered with additional insurance. If a family

    		•
  • Q : Equilibrium price level and level of

    Normal 0 false false

  • Q : Problem on banks Customers arrive at a

    Customers arrive at a bank with 2 tellers. The manager took the following data for 11 customers during a busy time. The manager has asked you to:(a) Create an event log. (b) Calculat

    		•
  • Q : Explain 3-year Expenditures and

    3-year Expenditures and Positions: The display at the beginning of each departmental budget which presents the different departmental programs by title, dollar totals, places, and source of funds for the past, current, and budget years.

    		•
  • Q : Resources flow Normal 0 false false

    Normal 0 false false

  • Q : Explain the role of a dealer in the OTC

    Normal 0 false false

    		•
  • Q : Define Legislative Counsel Bureau

    Legislative Counsel Bureau: The staffs of attorneys who draft legislation (that is, bills) and proposed amendments, and analyze, review, and render beliefs on legal matters for legislative members.

    		•
  • Q : Better risk measure in evaluating risk

    Why is the coefficient of variation a better risk measure to employ than the standard deviation while evaluating the risk of capital budgeting projects? The coefficient of variation is a better risk measure than the standard deviation alone sinc

    		•