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uranmaximum [27]
3 years ago
7

The consumption and saving functions in the Keynesian model Suppose we observe that a person's disposable income (DI) is 50,000

in 2019 and 63,000 in 2020. Suppose we observe that this person's consumption (C) is 47,000 in 2019 and 58,700 in 2020. Assume that this person's consumption obeys the Keynesian consumption function, so that C = A + MPC*DI. Finally, assume that A and MPC are unchanged between 2019 and 2020.
(a) Calculate the values of A and MPC for this consumer, and graph the consumption function. (Hint: subtract the C function in 2019 from the C function of 2020).
(b) In general, saving is given by the formula S = DI - C. Calculate this person's saving in 2019 and 2020. Assuming that this person's wealth (net worth) on January 1, 2019 was 80,000, what is their wealth on January 1, 2020? on January 1, 2021?
(c) In general, if consumption is given by the function C = A + MPC DI, then saving will obey the saving function S = -A + (1 - MPC)*DI. Plot the saving function graphically for the consumer in this problem (using the values you found in part (a)). What is this consumer's marginal propensity to save?
(d) Calculate the level of disposable income such that saving is exactly zero for this person. If disposable income is less than this level, what happens to saving? Explain how a person can have negative saving, and give two examples of how a person can finance negative saving.
Business
1 answer:
katen-ka-za [31]3 years ago
3 0

Answer:

a

Explanation:

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myrzilka [38]

Based on the information given, the thing that should be done to keep the exchange rate at $0.12 per dirham is to sell foreign currencies to get more dirham.

It should be noted that since the non-official supply and demand of dirham is pegged at $0.15/ Dirham and the actual rate is $0.12/dirham, it implies that the Dirham is devaluated.

 

The authority will believe that due to devaluation, net export will rise and this will increase the income of the country.

Lastly, the private investors and speculators will not invest because the currency has lost its value compared to the dollars.

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2 years ago
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3 years ago
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IceJOKER [234]

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The value of market shares is directly proportionate to the amount of money spent on advertising

Explanation:

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5 0
4 years ago
Kegler Bowling installs automatic score-keeping equipment with an invoice cost of $190,000. The electrical work required for the
kogti [31]

Answer:

 $229,550  

Explanation:

The computation of the total recorded cost is shown below:

Particulars  Total cost Included or  Excluded Machinery Expense

Invoice cost $190,000 Included                         $190,000  

Electrical work

required

for installation  $20,000 included                         $20,000  

Delivery costs  $4,000         included                          $4,000  

Sales tax      $13,700         included                           $13,700  

Repair costs   $1,850          excluded                                   $1,850

Total            $229,550                                      $227,700 $1,850

The invoice cost, electrical cost, delivery cost, sales tax included in the machinery and the repair cost is an expense so it come under the expense  

8 0
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