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Catégorie :Category: nCreator TI-Nspire
Auteur Author: kalistak
Type : Classeur 3.0.1
Page(s) : 1
Taille Size: 2.74 Ko KB
Mis en ligne Uploaded: 22/10/2024 - 05:40:16
Uploadeur Uploader: kalistak (Profil)
Téléchargements Downloads: 1
Visibilité Visibility: Archive publique
Shortlink : http://ti-pla.net/a4267629
Type : Classeur 3.0.1
Page(s) : 1
Taille Size: 2.74 Ko KB
Mis en ligne Uploaded: 22/10/2024 - 05:40:16
Uploadeur Uploader: kalistak (Profil)
Téléchargements Downloads: 1
Visibilité Visibility: Archive publique
Shortlink : http://ti-pla.net/a4267629
Description
Fichier Nspire généré sur TI-Planet.org.
Compatible OS 3.0 et ultérieurs.
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Marginal Propensity Explanation Formula Marginal Propensity to Consume (MPC) The proportion of additional income that is spent on consumption (C) MPC = C / Y Marginal Propensity to Save (MPS) The proportion of additional income that is saved (S) MPS = S / Y Marginal Propensity to Tax (MPT) The proportion of additional income that is paid in tax (T) MPT = T / Y Marginal Propensity to Import (MPM) The proportion of additional income that is spent on imports (M) MPM = M / Y Calculating the Multiplier: The value of the multiplier can be calculated in one of two ways: By focusing on the marginal propensity to consume (MPC) By focusing on the withdrawals that occur on each additional dollar of income (MPS + MPT + MPM) 1. Focusing on the MPC: Multiplier = 1 / (1 MPC) 2. Focusing on the Withdrawals: Multiplier = 1 / MPW = 1 / (MPM + MPS + MPT) WORKED EXAMPLE: An economy has the marginal propensity to save of 0.15, marginal propensity to tax of 0.20, and a marginal propensity to import of 0.15. a) Calculate the size of the multiplier: Answer: Step 1: Insert the values into the withdrawal formula. Multiplier = 1 / (MPM + MPS + MPT) = 1 / (0.15 + 0.15 + 0.20) = 1 / 0.5 = 2 b) If the government increases their infrastructure spending by £60m, calculate the total increase in GDP, assuming all other things remain equal. Answer: Step 2: Multiply the injection by the multiplier. Impact on GDP = Injection x multiplier = £60m x 2 = £120m WORKED EXAMPLE: Calculate the amount of government spending required to restore an economy's macroeconomic equilibrium if the economy faces a $22bn recessionary gap and its MPC is 0.6. Answer: Step 1: Calculate the multiplier. Multiplier = 1 / (1 MPC) = 1 / (1 0.6) = 2.5 [1 mark] Step 2: Calculate the value of government spending required. Government spending required = $22bn / 2.5 = $8.80bn [1 mark] Page 6: Significance of the Multiplier in Shifting Aggregate Demand (AD): The greater the withdrawals, the smaller the value of the multiplier (and vice versa). The greater the MPC, the higher the value of the multiplier (and vice versa). Any change in factors impacting disposable income will change the multiplier. If taxes increase, the value of the multiplier reduces. If interest rates increase, savings increase, consumption decreases, and the multiplier reduces. If exchange rates appreciate, the level of imports increases, and the multiplier decreases. If confidence in the economy increases, consumption increases, and the multiplier increases. It is extremely useful for the government to know the value of the multiplier, as they can use it to judge the likely economic growth caused by increased spending. There is a time lag, as it takes time for the successive rounds of income to work through the economy. EXAM TIP: The final bullet point mentions time lags. This is an excellent point to include in any evaluation on the effectiveness of the multiplier. It may take up to 18 months for the full multiplier effect to be seen, and any change to consumer confidence during this period will impact the final outcome. Made with nCreator - tiplanet.org
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Compatible OS 3.0 et ultérieurs.
<<
Marginal Propensity Explanation Formula Marginal Propensity to Consume (MPC) The proportion of additional income that is spent on consumption (C) MPC = C / Y Marginal Propensity to Save (MPS) The proportion of additional income that is saved (S) MPS = S / Y Marginal Propensity to Tax (MPT) The proportion of additional income that is paid in tax (T) MPT = T / Y Marginal Propensity to Import (MPM) The proportion of additional income that is spent on imports (M) MPM = M / Y Calculating the Multiplier: The value of the multiplier can be calculated in one of two ways: By focusing on the marginal propensity to consume (MPC) By focusing on the withdrawals that occur on each additional dollar of income (MPS + MPT + MPM) 1. Focusing on the MPC: Multiplier = 1 / (1 MPC) 2. Focusing on the Withdrawals: Multiplier = 1 / MPW = 1 / (MPM + MPS + MPT) WORKED EXAMPLE: An economy has the marginal propensity to save of 0.15, marginal propensity to tax of 0.20, and a marginal propensity to import of 0.15. a) Calculate the size of the multiplier: Answer: Step 1: Insert the values into the withdrawal formula. Multiplier = 1 / (MPM + MPS + MPT) = 1 / (0.15 + 0.15 + 0.20) = 1 / 0.5 = 2 b) If the government increases their infrastructure spending by £60m, calculate the total increase in GDP, assuming all other things remain equal. Answer: Step 2: Multiply the injection by the multiplier. Impact on GDP = Injection x multiplier = £60m x 2 = £120m WORKED EXAMPLE: Calculate the amount of government spending required to restore an economy's macroeconomic equilibrium if the economy faces a $22bn recessionary gap and its MPC is 0.6. Answer: Step 1: Calculate the multiplier. Multiplier = 1 / (1 MPC) = 1 / (1 0.6) = 2.5 [1 mark] Step 2: Calculate the value of government spending required. Government spending required = $22bn / 2.5 = $8.80bn [1 mark] Page 6: Significance of the Multiplier in Shifting Aggregate Demand (AD): The greater the withdrawals, the smaller the value of the multiplier (and vice versa). The greater the MPC, the higher the value of the multiplier (and vice versa). Any change in factors impacting disposable income will change the multiplier. If taxes increase, the value of the multiplier reduces. If interest rates increase, savings increase, consumption decreases, and the multiplier reduces. If exchange rates appreciate, the level of imports increases, and the multiplier decreases. If confidence in the economy increases, consumption increases, and the multiplier increases. It is extremely useful for the government to know the value of the multiplier, as they can use it to judge the likely economic growth caused by increased spending. There is a time lag, as it takes time for the successive rounds of income to work through the economy. EXAM TIP: The final bullet point mentions time lags. This is an excellent point to include in any evaluation on the effectiveness of the multiplier. It may take up to 18 months for the full multiplier effect to be seen, and any change to consumer confidence during this period will impact the final outcome. Made with nCreator - tiplanet.org
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