Multiplier__Model_review_sheets_no_graph

# Multiplier__Model_review_sheets_no_graph - Multiplier Model...

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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.

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## 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.

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Multiplier__Model_review_sheets_no_graph - Multiplier Model...

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