Problem 10-1 (AIgo) The following table provides data for output (real GDP) and

Question

Problem 10-1 (AIgo) The following table provides data for output (real GDP) and saving a. Fill in the missing numbers (gray-shaded cells) in the table Instructions: In the table, round your answers to 3 decimal places. If you are entering any negative numbers be sure to include a 6.87 points 800negative sign (-) in front of those numbers. Level of Output and Consumption APC Saving S-16 -8 APS Income (GDP - DI) S240 260 280 300 320 340 360 380 400 eBook Print 24 32 40 48 What is the value of the marginal propensity to consume? Instructions: Round your answer to one decimal place What is the value of the marginal propensity to save? b. What is the break-even level of income in the table? Instructions: Enter your answer as a whole number Break-even level of income- What is the term that economists use for the saving situation shown at the $240 level of income? Click to select) C. For each of the following items, indicate whether the value in the table is either constant or variable as income changes The MPS is (Click to select) as income changes. The APC is (Click to select) as income changes The MPC is (Click to select) as income changes The APS is (Click to select) as income changes.

Explanation / Answer

Marginal Propensity to Consume (MPC)=0.6

Marginal Propensity to save (MPS)=0.4

Breakeven income when Consumption =DI =$280

At income $240 consumer borrows term is borrowing

MPC and MPS is constant APC and APS are variable

GDP Consumption Savings APC APS MPC MPS 240 256 -16 1.07 -0.07 260 268 -8 1.03 -0.03 0.60 0.40 280 280 0 1.00 0.00 0.60 0.40 300 292 8 0.97 0.03 0.60 0.40 320 304 16 0.95 0.05 0.60 0.40 340 316 24 0.93 0.07 0.60 0.40 360 328 32 0.91 0.09 0.60 0.40 380 340 40 0.89 0.11 0.60 0.40 400 352 48 0.88 0.12 0.60 0.40

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