Georgia Military College Consumption Function & Equilibrium Income Questionnaire

Question Description

I’m working on a macro economics writing question and need an explanation to help me learn.

Find the equilibrium level of output (Y) for the economy, where the consumption function is given as C=200+0.8Y and the Planned Investment= 50?

Question 1 options:

	1,250
	1,200
	1,300
	1,100

How much will $400 in new planned investment change equilibrium income if the marginal propensity to save (MPS) is 0.2?

Question 2 options:

	$1,000
	$1,500
	$20
	$2,000

If income rises from $10,000 to $15,000 and consumption increases from $9,000 to $12,000, then MPC is ____

Question 3 options:

	0.50
	0.60
	0.70
	0.80

If MPC is 0.8 and income increases from $10,000 to $11,000, by how much does saving increase?

Question 4 options:

	$11,000
	$800
	$1,000
	$200

What is the multiplier if the marginal propensity to consume is 0.2?

Question 5 options:

	0.7
	1.25
	0.8
	1.5

Which of the following will NOT cause an increase in the consumption?

Question 6 options:

	James’s family wealth increases.
	James expects decrease in price of gas.
	James’s family debt increases.
	James’s personal taxes decrease.

If MPC is 0.8 and income increases from $10,000 to $11,000, by how much does consumption increase?

Question 7 options:

	$200
	$11,000
	$800
	$1,000

Which of the following will NOT cause an increase in the planned investment?

Question 8 options:

	increase in interest rate
	lower capital goods on hand
	expectations of economic growth
	reduction in operating costs

Because Anna received a raise in pay from $100,000 to 110,000 , her consumption increased from $60,000 to $65,000. What is Anna’s marginal propensity to consume?

Question 9 options:

	2
	0.75
	1
	0.5

Georgia Military College Consumption Function & Equilibrium Income Questionnaire

Question Description

If MPC is 0.8 and income increases from $10,000 to $11,000, by how much does consumption increase?

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