Break-even level of income, Macroeconomics

Assume that when an economy has a GDP of $500, Consumption is $550. The MPC is .75. Investment is 25. Begin the problem by setting up an Income/Consumption Schedule like the one on page 190 of your text. Set up only the first two columns (1) and (2).

            Level of          

            Output            

            And

            Income            consumption

            (GDP=DI)                     ( C )

            $500                $550

1. Graph the Consumption Function.

2. Add Investment to the graph.

3. What is the multiplier?

4. What is the Break-Even level of Income? (Do not include Investment)

5. What is the Equilibrium level of Income? (Include Investment)

6. What would be the new equilibrium in this economy if Investment increased by $12?

Posted Date: 2/23/2013 6:51:39 AM | Location : United States







Related Discussions:- Break-even level of income, Assignment Help, Ask Question on Break-even level of income, Get Answer, Expert's Help, Break-even level of income Discussions

Write discussion on Break-even level of income
Your posts are moderated
Related Questions
Minimum wage laws are common in many countries. The debate over minimum wage includes claims about the impact of this action on employment levels and wage levels. What impact does

Should dental offices be accredited similar to the standards that hospitals are?

is there a graph for says law?

Define the term - Productivity Productivity is the concept which measures how outputs can be maximised from given inputs. In factories labour productivity is normally calculate

If a social entrepreneur is relying on contributions, are there not risks in being accountable and using that money wisely?

Find the annual (yearly) real and nominal GDP numbers for Turkey from TCMB for the recent past. Use the EVDS system and TUIK data. Describe the source and definition of the data us

briefly explain with keynesian consumption?

The rate of interest in the UK also showed very interesting results, to an impulse shock on oil price. The middle left graph from Fig 4.4 shows the results. Initially, in the short

Q. Construction of real gross domestic product ? To be able to make reasonable comparisons of GDP over time, we should adjust for inflation. For instance, if prices are doubled

A new industry develops, and our government wants to protect it from foreign competition. Which one of the following arguments would appropriately describe this type of protection?