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HW_chap_13_part_1_answers_[1] - decreases by \$15 billion...

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Econ 100 San Francisco State HW Chapter 13 You do not need to turn this problem in to me, but you can assume that there will be problems very similar to it in either a quiz or an exam. It would greatly benefit your to do it. 1) Finish this table 2) If consume spending rises by \$9 billion when disposable income rises by \$12 billion, what is the marginal propensity to consume? What is the marginal propensity to save? MPC = \$9 billion / \$12 billion = .75 MPS = 1-.75 = .25 3) Lets that when there is an autonomous decrease in consumption of \$5 billion, real GDP
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Unformatted text preview: decreases by \$15 billion. What is the multiplier? \$15 billion / \$5 billion = 3 4) Lets say that the multiplier is 3.1 and there is an autonomous increase in inventory by \$4.3 billion. How much does the aggregate demand curve shift, and in what direction? 3.1 x \$4.3 billion = \$13.33 billion shift to the right Year Nominal GDP (\$ billions) Real GDP (billions 2005\$) GDP deflator 2003 432 555 (432/555)*100 = 77.8 2004 553 602 (553/602)*100 = 91.9 2005 641 641 (641/641)*100 = 100 2006 721 694 (721/694)*100 = 103.9 2007 805 720 (805/720)*100 = 111.8...
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