Question: Statistics Canada reported that in real terms, overall consumer spending increased by $11.3 billion in the first quarter of 2017. a. If the marginal propensity

Statistics Canada reported that in real terms, overall consumer spending increased by $11.3 billion in the first quarter of 2017.

a. If the marginal propensity to consume is 0.50, by how much will real GDP change in response?

b. If there are no other changes to autonomous spending other than the increase in consumer spending in part a, and unplanned inventory investment, I_Unplanned, decreased by $5 billion, what is the change in real GDP?

c. GDP at the end of 2016 was $1,812.7 billion. If GDP were to increase by the amount calculated in part b, what would be the percent increase in GDP?

Step by Step Solution

★★★★★

3.38 Rating (176 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a Real GDP increases as a result of this change in consumer spending by 1... 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

Students Have Also Explored These Related Macroeconomics Principles Questions!

Statistics Canada reported that in July 2000, the Canadian labor force was 15.95 million, Canadian employment was 14.87 million, and the Canadian working-age population was 24.31 million. Calculate...

Calculate Canadian net investment and gross investment during 2009. Statistics Canada reported that the capital stock was $6,113 billion at the end of 2008, $6,266 billion at the end of 2009, and...

Calculate Canadian depreciation and net investment during 2010. Statistics Canada reported that the capital stock was $6,113 billion at the end of 2008, $6,266 billion at the end of 2009, and $6,510...

5. Statistics Canada reported that, in real terms, overall consumer spending increased by $11.3 billion in the first quarter of 2017. a. If the marginal propensity to consume is 0.50, by how much...

5. The Bureau of Economic Analysis reported that, in real terms, overall consumer spending increased by $35.4 billion during October 2010. a. If the marginal propensity to consume is 0.52, by how...

1. What is the multiplier if the marginal propensity to consume (MPC) is 0.5? Calculate the marginal propensity to save (MPS)? 2. What is the multiplier if the MPS is 0.2? Calculate the MPC 4....

1. What is the multiplier if the marginal propensity to consume (MPC) is 0.5? Calculate the marginal propensity to save (MPS)? 2. What is the multiplier if the MPS is 0.2? Calculate the MPC. 3. As a...

The Bureau of Economic Analysis reported that, in real terms, overall consumer spending increased by $345.8 billion in 2015. a. If the marginal propensity to consume is 0.50, by how much will real...

The Bureau of Economic Analysis reported that, in real terms, overall consumer spending increased by $ 3 4 5 . 8 billion in 2 0 1 5 . If the marginal propensity to consume is 0 . 5 0 , by how much...

The Bureau of Economic Analysis reported that, in real terms, overall consumer spending increased by $66.2 billion during the second quarter of 2014. a. If the marginal propensity to consume is 0.52,...

There have been questions raised about the quality of legal representation provided to the poor. They also have suggested that racial minorities, who are more likely than whites to be poor, are...

Does the following drawing represent a neutral atom or an ion? Write its complete chemical symbol including mass number, atomic number, and net charge (if any). 16 protons+ 16 neutrons 18 electrons

Why are qualified annuities often recommended for retirement planning? Contributions are tax - deductible, reducing current taxable income, and earnings grow tax - deferred. They provide immediate...

l Most, if not all, companies have to juggle relationships with a great many other partners. This is certainly inadvisable in a marriage.

Economists have often noticed that as an economy recovers from a recession, interest rates start to rise. And, in general, interest rates tend to rise as the economy grows quickly. An example...

When Professor Alan Blinder returned to teaching after serving as vice-chairman of the Federal Reserve from 1994 to 1996, he was convinced that committees were not effective for making decisions...

Traditionally, to conduct monetary policy and to expand the money supply, the Fed purchased either outright or on temporary basis Treasury securities. When it purchased these securities for the...

The Matterhorn Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (I) Cash Flow (II) 0 $80,000 $38,000 1 31,000 13,000 2 40,000 27,500 3...

Which Display Ad format should you use if you're concerned about malware and want a secure ad experience across platforms? AMPHTML ads Search ads Image ads Responsive Display Ads

The Pioneer Petroleum Corporation has a bond outstanding with an $90 annual interest payment, a market price of $880, and a maturity date in six years. Assume the par value of the bond is $1,000....