Use the table below to solve this problem. Level of Output and Income (GDP =DI) $240...

Transcribed Image Text:

Use the table below to solve this problem. Level of Output and Income (GDP =DI) $240 260 280 300 320 340 360 380 400 Consumption $244 260 276 292 308 324 340 356 372 Saving -$4 0 4 8 22822 12 16 20 24 APC $ b. What will be the new level of saving? 1.0167 1.0000 0.9857 0.9733 0.9625 0.9529 0.9444 0.9368 0.9300 APS -0.0167 0.0000 0.0143 0.0267 0.0375 00471 0.0556 0.0632 0.0700 MPC 0.8 08 08 0.8 08 08 0.8 0.8 08 MPS 0.2 02 102 02 02 02 0.2 02 02 Suppose the wealth effect is such that $10 changes in wealth produce $1 changes in consumption at each level of income. Instructions: Enter your answers as a whole number. a. If real estate prices tumble such that wealth declines by $80, what will be the new level of consumption at the $340 billion level of disposable income? Use the table below to solve this problem. Level of Output and Income (GDP =DI) $240 260 280 300 320 340 360 380 400 Consumption $244 260 276 292 308 324 340 356 372 Saving -$4 0 4 8 22822 12 16 20 24 APC $ b. What will be the new level of saving? 1.0167 1.0000 0.9857 0.9733 0.9625 0.9529 0.9444 0.9368 0.9300 APS -0.0167 0.0000 0.0143 0.0267 0.0375 00471 0.0556 0.0632 0.0700 MPC 0.8 08 08 0.8 08 08 0.8 0.8 08 MPS 0.2 02 102 02 02 02 0.2 02 02 Suppose the wealth effect is such that $10 changes in wealth produce $1 changes in consumption at each level of income. Instructions: Enter your answers as a whole number. a. If real estate prices tumble such that wealth declines by $80, what will be the new level of consumption at the $340 billion level of disposable income?

Answer rating: 100% (QA)

Solution Given that Level of output and income GDP DI Ranging from 240 to 400 ... View the full answer