MPC, MPS, Equilibrium etc. help (1 Viewer)

[izzy_xo]

Hi everyone,

I was just going through the past papers and I seem to be struggling on any questions to do with MPC, MPS, equilibrium etc. I was wondering if anyone could help me with the following questions, help would be greatly appreciated.

Cheers.

1. What is the equilibrium level of income of c=100 + 0.8y and i=40


Thanks again

 

[nutcracker]

C + I = 140 + 0.8Y

140 + 0.8Y = Y
0.2Y = 140
Ye = 700

i believe.

 

[izzy_xo]

thanks

 

[nutcracker]

np

 

[izzy_xo]

one more question ! lol

2009 HSC paper question 18

if anyone could help thanks !

 

[PilotMerp]

Answer is D

MPC is constant

therefore an increase of 100 income leads to an increase of 50 consumption

if consumption increases by 100 then income must have increased by 200

for MPC to remain constant

 

[izzy_xo]

thank you !