1.If the marginal propensity to save (MPS) is 0.30,

Instructions:Round your responses to two decimal places.

a. the marginal propensity to consume (MPC) is ?

b. the multiplier is ?

2.Suppose consumers' disposable income increased by $200 billion and their spending increased by $170 billion. What was the MPC?

Instructions:Round your response to two decimal places.

MPC =?

3.Suppose the government increases education spending by $30 billion. If the marginal propensity to consume is 0.85, how much will total spending increase?

Instructions:Round your response to one decimal place.

$billion

4.Given the following data, answer four questions about the money supply and the money multiplier.

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eztomheducationcom 1)) Cl I o \\ iii , 01 ' Week 8: Homework 0 Saved Help Savea Exlt Submit Check my work 4 Given the following data, answer four questions about the money supply and the money multiplier. 10 points Value Total reserves: $46 billion B k Transactions deposits: $800 billion e Cash held by public: $300 billion Ask Bonds held by public: $250 billion prim Stocks held by public: $145 billion Gross domestic product: $8 trillion References Interest rate: 5 peoent Required reserve ratio: 0.05 a. How large is the money supply (M1)? :| billion b. How much excess reserves are there? : billion Instructions: Round your response to two decimal places. c. What is the money multiplier? :I ezto.mheducation.com 4)) cl Week 8: Homework 0 5 points 10 eBook Ask Print References Value Total reserves: $60 billion Transactions deposits: $400 billion Cash held by public: $350 billion Required reserve ratio: 0.10 a. How large is the money supply (M1)? b. Are the banks fully utilizing their lending capacity? Banks currently have Now assume that the public deposited another $20 billion in cash in transactions accounts. 0. What would happen to the money supply initially (before any lending takes place)? Saved Assuming the $20 billion in cash is not new money in the system. M1 will Help billion billion in excess reserves. Save 3. Exit Check my work Submit