A Japanese car manufacturer builds a car manufacturing plant in Ontario. In the first year of...

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A Japanese car manufacturer builds a car manufacturing plant in Ontario. In the first year of operation, the company employs two hundred local people and pays out a total wage and salary bill of $5 million. After personal savings, taxes and the purchases of imports, the autoworkers spend$2 million on domestic consumer goods and services. a) What is the marginal propensity to consume of the autoworkers in Ontario? Show your steps of calculations. (1) b) Assuming that all people in Ontario have the same MPC as the autoworkers, what is the size of the multiplier of Ontario? (Show your steps of calculations and correct your answer to two decimal places.) (1) c) After the multiplier effect, what would be the final increase in total output in Ontario? (Show your steps of calculations and correct your answer to two decimal places.) (1) A Japanese car manufacturer builds a car manufacturing plant in Ontario. In the first year of operation, the company employs two hundred local people and pays out a total wage and salary bill of $5 million. After personal savings, taxes and the purchases of imports, the autoworkers spend$2 million on domestic consumer goods and services. a) What is the marginal propensity to consume of the autoworkers in Ontario? Show your steps of calculations. (1) b) Assuming that all people in Ontario have the same MPC as the autoworkers, what is the size of the multiplier of Ontario? (Show your steps of calculations and correct your answer to two decimal places.) (1) c) After the multiplier effect, what would be the final increase in total output in Ontario? (Show your steps of calculations and correct your answer to two decimal places.) (1)

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a The marginal propensity to consume MPC can be calculated by dividing the change in co... View the full answer