Illustrate what would their new estimate of the mpc

Assignment Help Business Economics
Reference no: EM1348400

Suppose economists observe that an increase in government spending of $10 billion raises the total demand for goods and services by $30 billion.

a. If these economists ignore the possibility of crowding out, what would they estimate the marginal propensity to consume (MPC) to be?

b. Now suppose the economists allow for crowding out. Illustrate what would their new estimate of the MPC be larger or smaller than their initial one?

Reference no: EM1348400

Questions Cloud

Fixed versus fixed cost behavior : Complete the proceeding table by filling out the missing amounts for the levels of activity shown in the first row of the table. Round all cost per unit figures to the nearest whole penny.
Review the logic used to develop brake systems : Analyse the operational characteristics of the current system / component available in the market and future systems yet to come into production. Analyse the effect of the system on the environment and its sustainability.
Is there a difference between good stress and bad stress : Excessive stress is associated with various negative health outcomes, including heart disease and obesity, but some people appear to thrive in stressful environments.
The cost-cutting measures : Based on the cost-cutting measures you identified, state how much money every year you anticipate saving if you implemented every measure.
Illustrate what would their new estimate of the mpc : Now suppose the economists allow for crowding out. Illustrate what would their new estimate of the MPC be larger or smaller than their initial one.
Employee wellness programs and individual stress : Show your understanding of the employee wellness program and explain why some organizations have accepted the responsibility for promoting employee
Joint cost and utilization of scarce resources : The Dallas plant of Oscar Chemical processes talphazine into zetazine and gammazine. A batch consists of 20,000 gallons of talphazine, costing $11,000.
Illustrate what would be appropriate elasticity to compute : The price of twinkies fell from 0.80 to 0.70.As a result,the quantity demanded of Ho-Ho's decrease from 120 to 100. Illustrate what would be the appropriate elasticity to compute. compute this elasticity.
Determine profitability ratios : Based on your analysis, determine which corporation is better able to pay current liabilities. Describe your rationale.

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd