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Questions and Answers
Which equation represents the relationship between income, Marginal Propensity to Consume (MPC), and Marginal Propensity to Save (MPS)?
Which equation represents the relationship between income, Marginal Propensity to Consume (MPC), and Marginal Propensity to Save (MPS)?
- MPC = Change in Consumption / Change in Income
- K = 1 / MPS
- Y = MPC + MPS (correct)
- Effect in Economy = Y x K
What is the formula for the multiplier coefficient (K)?
What is the formula for the multiplier coefficient (K)?
- K = 1 / Y
- K = 1 / (1-MPC) (correct)
- K = 1 / MPS
- K = 1 / (1+MPC)
If a person has an MPC of 80%, what is the multiplier coefficient (K)?
If a person has an MPC of 80%, what is the multiplier coefficient (K)?
- K = 1 / (1+0.8)
- K = 1 / (1+80%)
- K = 1 / (1-0.8)
- K = 1 / (1-80%) (correct)
What is the effect in the economy if a person with a P100 income per day has a multiplier coefficient (K) of 5?
What is the effect in the economy if a person with a P100 income per day has a multiplier coefficient (K) of 5?
What is the interpretation of the multiplier effect in the given example?
What is the interpretation of the multiplier effect in the given example?
What happens to the P80 income that is consumed in the given example?
What happens to the P80 income that is consumed in the given example?
What is the total aggregate income in the economy resulting from the process in the given example?
What is the total aggregate income in the economy resulting from the process in the given example?
What is the formula for calculating MPC?
What is the formula for calculating MPC?
What is the formula for calculating MPS?
What is the formula for calculating MPS?
What is the formula for calculating the effect in the economy?
What is the formula for calculating the effect in the economy?
According to the text, what is the purpose of macroeconomics?
According to the text, what is the purpose of macroeconomics?
What does the Production Possibilities Frontier (PPC) represent?
What does the Production Possibilities Frontier (PPC) represent?
What are the conditions represented by the PPC?
What are the conditions represented by the PPC?
How can the impossible production be attained?
How can the impossible production be attained?
What is consumption in macroeconomics?
What is consumption in macroeconomics?
What does the multiplier effect or coefficient denote?
What does the multiplier effect or coefficient denote?
What are the two disagreements over how a country should achieve optimum wealth?
What are the two disagreements over how a country should achieve optimum wealth?
What is the role of the producer in the production of goods and services?
What is the role of the producer in the production of goods and services?
What is the role of the consumer in spending and savings?
What is the role of the consumer in spending and savings?
What are the problems to solve in macroeconomics?
What are the problems to solve in macroeconomics?
