Marginal Propensity to Consumption Assignment

Homework Assignment II (5 p.) due Thursday, 05/02, before class. Please use canvas to submit your answers (as doc, docx, pdf).
Answer the following questions.
1) Assume the following values: Marginal Propensity to Consume (MPC) b = 0.8; Autonomous Consumption a = 250; Investment Spending I = 500. There is no government spending at this point.
a) For a consumption function C = a bY, what is the equilibrium value for income Y in the economy (Y = C I, here)? (1)
b) What is the value of Y if Investment Spending increases to 750? (0.5)
c) What can you observe in the change in Y that follows changes in I? How is the effect called that is apparent in your results? (1)
d) If you add the government sector, with expenditure G = 250, what is the new equilibrium income? (For I = 750) (0.5)
2) What happens when the Marginal Propensity to Save (MPS) is reduced? How does equilibrium output change? (1)
3) Use the MPS to explain the paradox of thrift. (1)

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
Open chat
You can contact our live agent via WhatsApp! Via + 1 3234125597

Feel free to ask questions, clarifications, or discounts available when placing an order.