gross national product (GNP). This means that the nation produces domestically more than it is able to consume domestically. A5-4. If aggregate household saving is negative‚ the marginal propensity to save from disposable income must be negative. A5-5. If desired aggregate expenditure is greater than actual national output‚ national output will increase. A5-6. If the domestic price level decreases‚ the price of
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Macroeconomics textbook notes Chapter 2: A Tour of the Book 2.1 Aggregate Output Aggregate: means “total” The measure of aggregate output in the national income accounts is gross domestic product (GDP) 3 ways of thinking about an economy’s GDP GDP is the value of the final goods and services produced in the economy during a given period Intermediate good is a good used in the production of the final goods and is not counted toward GDP GDP is the sum of value added in the Economy during a given
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Question set – answers to short questions 1. Assume that the price of pizza is $2.00 per slice. The marginal cost of the 3rd slice of pizza is: $2.00 2. Which of the following best describes the concept of opportunity cost for a particular decision? The value of the next best (but not chosen) alternative. 3. If the quantity demanded of tea increases by 10% when the price of tea decreases by 2%‚ the price elasticity of demand for tea is: +10 / -2 = - 5.00 4. An increase in your income
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The University of Melbourne Semester 1 Assessment 2011 Department of Economics ECON10003 Introductory Macroeconomics Reading Time 15 minutes Writing Time 2 hours This paper has Nine (9) pages. This examination paper contributes 60 per cent to the assessment in ECON10003. Authorised Materials: The following items are authorised: English/foreign language dictionary. Scientific Calculator. Instructions to Invigilators: Students require: script books and multiple choice computer answer sheets
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Assignment Questions (Summer‚ 2012) Part A – Microeconomics – Worth 10% of total assessment: Answer any five (5) of the following questions. Each question is worth 10 marks. Question 1: Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month? Explain your choice. (a) The cost of cocoa (1 mark). (b) Business rates (local taxes).(1 mark) (c) An advertising campaign for a new chocolate bar
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lead to greater increase in the final level of equilibrium National Income. SIZE OF THE MULTIPLIER The size of the multiplier depends on how much of an increase in income is spent in an economy. The multiplier is the direct function of marginal propensity to consume (MPC). The size of multiplier depends upon how large or small is the MPC. If MPC is high‚ the value of the multiplier will also be high. If MPC is small‚ the value of the multiplier will also be small MPC and MPS Y=C+S Change in
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nation’s) income increases or decreases. b. that portion of total consumption that is dependent upon the level of income. c. the steady increase in the consumption of goods and services that automatically occurs as a person grows from a child to an adult. d. that portion of total consumption that is independent of the level of income. Q 20‚ Chp 10 3. If income rises from $1‚000 to $1‚400 and consumption rises from $800 to $1‚175‚ the marginal propensity to consume is __________ percent. a.
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of equations as consistent‚ inconsistent or dependent a) -5x - y = -5 y = -5x b) 6x + 2y = 12 y = -3x + 6 c) y = 3/4x + 5 -6x - 8y = 24 3. Y=C+I C=1000+0.8Y I=250 a) Find b) Determine the multiplier‚ k and interpret the result c) Assume marginal propensity to consume (mpc)‚ b changes to 0.75. Calculate new explain the change. and 1 ECO 134 Instructor: Parisa Shakur ASSIGNMENT 3 = =65‚ + = + Marks:10 4. Y=C+I where = 70‚ b=0.6 and a=0.2 a) Find the reduced form of the following
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constraint is measured by the a. consumer ’s income divided by the price of hamburgers. b. relative price of books and hamburgers. c. consumer ’s marginal rate of substitution. d. number of books purchased divided by the number of hamburgers purchased. ANS: B PTS: 1 DIF: 2 REF: 21-1 TOP: Budget constraint MSC: Interpretive 4. If a consumer ’s income decreases‚ the budget constraint for CDs and DVDs will a. shift outward‚ parallel to the original budget constraint. b. shift inward‚ parallel to the original
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Form 6 Economics Unit 2 1 ½ Hours Answer ALL questions 1. Which one of the following constitutes a leakage from the circular flow of income? a. The purchase of a domestically produced good by a domestic company b. The purchase of a domestically produced good by a foreign company c. The payment of value added tax on goods sold to the domestic market d. Government aid to companies in financial difficulties 2. Which of the following is not a reason for a country collecting national income
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