Answer to Question #109940 in Macroeconomics for Kg

Question

Consider the following information to answer questions
Government spending = R550
Exports = R330
Autonomous consumption = R280
Autonomous imports = R170
Investment expenditure = R120
Marginal propensity to consume =0,75
Full employment level of income =R5700
A. Autonomous expenditure is equal to
1. R900
2.R960
3. R1 040
4. R1 110

B. What is the marginal propensity to save?
1. 1
2. 1,60
3. 0,25
4. 0,40

C. What is the value of the multiplier?
1. 2
2. 2,50
3. 4
4. 3

C. What is the equilibrium level of income Y*?
1. R5 120
2. R4 440
3. R4 400
4. R 5 260
D. An increase in government spending in the Keynesian model leads to ...
1. Demand that is greater than supply
2. Demand that is lesser than supply
3. Demand that equals supply
4. Decrease in production

Answer 1

A. Autonomous expenditure is equal to

4. R1 110

B. The marginal propensity to save is:

3. 0,25

C. The equilibrium level of income Y* is:

2. R4 440

D. An increase in government spending in the Keynesian model leads to ...

1. Demand that is greater than supply