Question: At an initial point on the aggregate demand curve, the price level is 100, and real GDP is $15 trillion. After the price level rises

At an initial point on the aggregate demand curve, the price level is 100, and real GDP is $15 trillion. After the price level rises to 110, however, there is an upward movement along the aggregate demand curve, and real GDP declines to $14 trillion. If total autonomous spending declined by $200 billion in response to the increase in the price level, what is the marginal propensity to consume in this economy?

Step by Step Solution

★★★★★

3.48 Rating (164 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Real Gross Domestic Production GDP refers to the total value of all final goods and servic... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

985-B-E-M-E (6841).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

In Freezone, shown in Figure 30.4, the aggregate demand curve is AD, potential GDP is $300 billion, and the short-run aggregate supply curve is &4SB. In Figure 30.4, a. What are the price level and...

On the following graph, plot the aggregate demand curve that results from varying the price level from 100 to 120 to 140 holding all else equal. Hint Real income and the quantity of output are...

What does the aggregate demand curve show? What factors change and what factors remain the same when there is a movement along the aggregate demand curve?

At an initial point on the aggregate demand curve, the price level is 100, and real GDP is $18 trillion. After the price level rises to 110, however, there is an upward movement along the aggregate...

At an initial point on the aggregate demand curve, the price level is 125, and real GDP is $15 trillion. When the price level falls to a value of 120, total autonomous expenditures increase by $250...

At an initial point on the aggregate demand curve, the price level is 125, and real GDP is $18 trillion. When the price level falls to a value of 120, total autonomous expenditures increase by $250...

The aggregate demand curve: 0 A. shows the level of real GDP produced in the economy at different possible price levels during a period of time. Q B. shifts to the left whenever there is an increase...

The table gives four possible situations that might arise in 2020, depending on the level of aggregate demand in 2020. Price level (2019 = 100) Real GDP (trillions of 2019 dollars) Unemployment rate...

Please answer correct calculation asap plz Don't answer by pen paper plz An economy is initially in longrun equilibrium with a price level of 100 and real GDP of $5 billion. Then. an increase in...

Consider the following convex programming problem: Maximize f(x) = 2x1 (x2 3)2, Subject to x1 3 and x2 3. (a) If SUMT were applied to this problem, what would be the unconstrained function P(x;...

What are some of the primary causes of failure associated with preparing for a data warehouse project?

An experiment will be done to determine whether college students learn information better when listening to rap music, when listening to classical music, or when not listening to music. In the study,...

Assume that MPC = 4 5 when answering the fol lowing questions a. If government expenditures rise by $1 billion, by how much will the aggregate expenditure curve shift upward? b. If taxes rise by $1...

The Legal Environment Dimension How might Reznor, or anyone in a similar position, have avoided the negative impact of the result in this case?

If Shuebkes review was conducted in good faith and conformed to generally accepted accounting principles, could Superior hold Shuebke Delgado liable for negligently failing to detect material...

According to the rule adopted by the majority of courts to determine accountants liability to third parties, could Chase be liable to Superior? Superior Wholesale Corporation planned to purchase...

Please help me: A report included the following information on the heights (in.) for non-Hispanic white females. Sample Sample Std. Error Age Size Mean Mean 20-39 865 63.7 0.09 60 and older 934 62.1...

Investment Portfolio Sid, a widower of 45, has two adult children who both have good full-time jobs. He owns a prosperous hardware store and recently paid off the mortgage on his house. He earns a...

2. [15] This question is regarding the 5-stage MIPS pipeline with data forwarding and hazard detection. [5] Consider the following MIPS code. Mark "X" on instruction(s) for which the ALU uses a...