1. Use the numbers to answer the following questions:
|
Income
|
Spending
|
|
$0
|
$12,000
|
|
$40,000
|
$36,000
|
a) What is autonomous spending?
b) What is induced spending when income = $40,000?
c) What is the mpe as income increases from $0 to $40,000?
d) What is the spending multiplier?
e) If autonomous spending increases by $50,000, what will happen to income?