value: 3.00 points The following table provides data for output (real GDP) and s
ID: 1109012 • Letter: V
Question
value: 3.00 points The following table provides data for output (real GDP) and saving. a. Fill in the missing numbers (gray shaded cells) in the table Instructions: In the table, round your answers to 3 decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. of Output ConsumptionSaving APC APS and Income 480 520 560 600 640 680 720 760 800 -8 12 20 24 What is the value of the marginal propensity to consume? What is the value of the marginal propensity to save? b. What is the break-even level of income in the table? Instructions: Enter your answer as a whole number. Break-even level of income $ What is the term that economists use for the saving situation shown at the $480 level of income?(Click to select) c. For each of the following items, indicate whether the value in the table is either constant or variable as income changes: MPS: (Click to select) as income changes. APC : (Click to select) as income changes. MPC: | (Click to select) as income changes. APSI (Click to select) as income changes.Explanation / Answer
(a)
Working notes:
(i) Consumption (C) = Income (Y) - Saving (S)
(ii) APC = C / Y
(iii) APS = S / Y
Filled-in table as follows.
Marginal propensity to consume (MPC) = Change in C / Change in Y = (524 - 488) / (520 - 480) = 36 / 40 = 0.9
Marginal propensity to save (MPS) = 1 - MPC = 1 - 0.9 = 0.1
(b) In break-even, Income = Consumption
Break-even level of income = 560
(c)
Let us compute MPC and MPS for each Y & C level, as follows.
MPS: Constant as income changes
APC: Varies as income changes
MPC: Constant as income changes
APS: Varies as income changes
Y C S APC APS 480 488.000 -8 1.017 -0.017 520 524.000 -4 1.008 -0.008 560 560.000 0 1.000 0.000 600 596.000 4 0.993 0.007 640 632.000 8 0.988 0.013 680 668.000 12 0.982 0.018 720 704.000 16 0.978 0.022 760 740.000 20 0.974 0.026 800 776.000 24 0.970 0.030Related Questions
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