# HW_chap_14_answers_[1] - Econ 100 San Francisco State HW...

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Econ 100 San Francisco State HW Chapter 14 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) a) Let’s say a country’s autonomous spending is \$400 billion, and their marginal propensity to consume is .6. What is their consumption function (in billions)? C = \$400 + .6 x YD b) What would their consumption be if their disposable income was: i. \$800 billion C = \$400 + .6 x \$800 = \$880 billion ii. \$850 billion C = \$400 + .6 x \$850 = \$910 billion iii. \$900 billion C = \$400 + .6 x \$900 = \$940 billion 2) If a country’s consumption function is C = \$700 + .4 x YD (in billions), what is their autonomous spending? What is their marginal propensity to consume? autonomous spending: \$700 billion MPC: .4 3) a) Fill out the table below. The consumption function is: C = \$100 + .5 x YD (billions). At what level of real GDP would this economy be at equilibrium? (The table is in

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## This note was uploaded on 09/08/2011 for the course ECON 100 taught by Professor Pgking during the Spring '08 term at S.F. State.

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HW_chap_14_answers_[1] - Econ 100 San Francisco State HW...

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