--%>
Assignment Help - homework help

Sizes of the MPC and MPS

Supposing the level of investment is $16 billion and independent of the level of net output, complete the following table and find out the equilibrium levels of output and employment in this private closed economy.  Determine the sizes of the MPC and MPS?

 

2381_MPC and MPS.png

E

Expert

Verified

Saving data for completing the table (top to bottom):  $-4; $0; $4; $8; $12; $16; $20; $24; $28.

Equilibrium GDP = $340 billion, find out where (1) aggregate expenditures equivalent GDP (C of $324 billion + I of $16 billion will be GDP of $340 billion); or (2) where planned I is S (I of $16 billion = S of $16 billion).  Equilibrium level of employ will be 65 million; MPC = .8; MPS = .2.

   Related Questions in Finance Basics

  • Q : Financial strategy describe the sales

    describe the sales forecasting process ?

    		•
  • Q : What is Indirect Costs Indirect Costs :

    Indirect Costs: The costs which by their nature can’t be readily related with a particular organization unit or program. Similar to general administrative expenses, indirect costs are dispersed to the organizational unit(s) or programs that bene

    		•
  • Q : What is Sunset Clause Sunset Clause :

    Sunset Clause: The language contained in a law which states the expiration (termination) date for that statute.

    		•
  • 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 : Role of depreciation in estimating

    What kind of role does depreciation play in estimating incremental cash flows? Depreciation expense is a tax deductible expense and therefore affects cash flow through its effect on taxes. Depreciation expense which is incremental to a proposed

    		•
  • Q : How cash and capital budget relate to

    Describe how the cash budget and the capital budget associate to proforma financial statements.The cash budget illustrates the projected flow of cash in and out of the firm for particular time periods. The capital budget illustrates planned expe

    		•
  • Q : Supply and demand 1. Albert Jones went

    1. Albert Jones went to his local department store to purchase a pair of Levi s. He thought that the style of Levi that he wanted would sell for about $30 a pair. When he got to the store, he saw a sign which said, Levi s, all styles, $18 a pair. Albert bought three pairs of Levi s. The behavior of

    		•
  • Q : Negative consequences of company

    Explain negative consequences of a company holding too much cash? A company holding too much cash would be giving up the chance to invest more in income generating assets

    		•
  • Q : Define Bill Bill : It is a draft of

    Bill: It is a draft of proposed law represented to the Legislature for performance. (A bill has bigger legal formality and standing than a resolution.) OR An invoice, or document statement, of an amount owing for s

    		•
  • Q : Describe utilization of a risk-adjusted

    Describe how utilizing a risk-adjusted discount rate develop capital budgeting decision making compared to utilizing a single discount rate for all projects? The risk-adjusted discount rate develop capital budgeting decision making compared to t

    		•