1) (MPC and MPS) If consumption increasesby $12 billion when real disposable inc

Question

1)   (MPC and MPS)        If consumption increasesby $12 billion when real disposable income increases by        $15billion, what isthe value of the MPC? What is the relationship between the MPC andthe           MPS? If the MPCincreases, what must happen to the MPS? How is the MPC related tothe       consumption function? How isthe MPS related to the saving function? 2)    (Government Spending)        How do changes indisposable income affect government purchases and governmentpurchase        function? How do changesin next taxes affect the consumption function? 3)   (Net Exports)       What factors are assumedconstant along the next export function? What would be the impacton       net exports of a change in realdisposable income? Thanks much for helping. 1)   (MPC and MPS)        If consumption increasesby $12 billion when real disposable income increases by        $15billion, what isthe value of the MPC? What is the relationship between the MPC andthe           MPS? If the MPCincreases, what must happen to the MPS? How is the MPC related tothe       consumption function? How isthe MPS related to the saving function? 2)    (Government Spending)        How do changes indisposable income affect government purchases and governmentpurchase        function? How do changesin next taxes affect the consumption function? 3)   (Net Exports)       What factors are assumedconstant along the next export function? What would be the impacton       net exports of a change in realdisposable income? Thanks much for helping.

Explanation / Answer

The Net Export Function – The relationship betweennet exports and the level of income in the economy, other thingsconstant.

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