Multiplier__Model_review_sheets_no_graph

Multiplier__Model_review_sheets_no_graph - Multiplier Model...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Multiplier Model – Practice Guide Name _____________________ A.  Autonomous / Induced Expenditures 1. Write the function: Aggregate Expenditures = ________________ + ________________ Induced expenditures are those expenditures consumers make as a result of receiving additional ____________ whereas autonomous expenditures are those expenditures consumers would have made with _________ income. B. Marginal Propensity to Expend 2. When consumers experience a change in income, they can either ___________ it or ____________ it. MPE = ____________ ____________ ____________ = the ratio of the change in expenditures to a change in income, in other words, when consumers have additional income of $1,000, how much of it will they spend? save? 3. If mpe = .5 & Y = $ 8000, what will be change in expenditures? __________ 4. If mpe = .25 & Y = $ -8000, what will be change in expenditures? __________ 5. If mpe = .75 & Y = $ 12,000, what will be change in expenditures? __________ 6. If consumers spent $333 of a $1,000 additional income, what was the mpe? _______ 7. If consumers saved $200 of a $1000 additional income, what was mpe?________ 8.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/18/2011 for the course ECON 101 taught by Professor Mcdounough during the Spring '11 term at DeVry Westminster.

Page1 / 3

Multiplier__Model_review_sheets_no_graph - Multiplier Model...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online