Question

In: Economics

All of the following household expenditures are included in consumption expenditure or C, EXCEPT________?

Professor Wilson ECON 10

All of the following household expenditures are included in consumption expenditure or C, EXCEPT________?

A. Purchase of a new hat.

B. Payment to a dentist for X-Rays.

C. Purchase of a new home.

D. Purchase of hair styling products.

Solutions

Expert Solution

The right answer is option C, that is, purchase of a new home, because the purchase of a new home will be included in the investment and not in the consumption expenditure.

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

Explain the ‘permanent income’ theory of household consumption expenditure.
Explain the ‘permanent income’ theory of household consumption expenditure.
Income    (Yd) Consumption Expenditure (C) Saving (S) Investment Expenditure (I) Government Expenditure (G) Net Export...
Income    (Yd) Consumption Expenditure (C) Saving (S) Investment Expenditure (I) Government Expenditure (G) Net Export Expenditure (NX) Aggregate Expenditure (AE) $8000 $11,000 $2,500 $5,000 $12,500   12,000 14,000 2,500 5,000 12,500 20,000 20,000 2,500 5,000 12,500 30,000 27,500 2,500 5,000 12,500 50,000 42,500 2,500 5,000 12,500 100,000 80,000 2,500 5,000 12,500 1. Calculate: Savings, MPC, MPS, Multiplier, and the equilibrium level of income (Y = AE = C + I + G + NX). 2. Draw a graph showing disposable...
7. Consider the following income-expenditure model of a closed economy. The aggregate consumption function is C...
7. Consider the following income-expenditure model of a closed economy. The aggregate consumption function is C = 100 +0.8(Y – T); taxes are T = 380; investment, I, is 300 and government expenditure, G, is 200. (a) Calculate the multiplier, equilibrium income and the government budget surplus [6 marks] (b) Now let taxes, T = 10 + 0.25Y. Recalculate the multiplier, equilibrium income and the government budget surplus. Try to explain any differences between your answers and your answers to...
7. Consider the following income-expenditure model of a closed economy. The aggregate consumption function is C...
7. Consider the following income-expenditure model of a closed economy. The aggregate consumption function is C = 100 +0.8(Y – T); taxes are T = 380; investment, I, is 300 and government expenditure, G, is 200. ( a)Calculate the multiplier, equilibrium income and the government budget surplus [6 marks] (b)Now let taxes, T = 10 + 0.25Y. Recalculate the multiplier, equilibrium income and the government budget surplus. Try to explain any differences between your answers and your answers to part...
Consider an economy with the following components of aggregate expenditure: Consumption function: C=20 + 0.8YD Investment...
Consider an economy with the following components of aggregate expenditure: Consumption function: C=20 + 0.8YD Investment function: I = 30 Government expenditures: G = 8 Export function: X= 4 Import function: M=2 + 0.2Y Tax rate, t = 0.2 or 20%. Answer the following question. What is the marginal propensity to consume in this economy? What is the equation of the aggregate expenditure function in this economy? Determine the size of the autonomous expenditure multiplier. Determine the size of the...
In a hypothetical economy, the aggregate consumption expenditure is given by C = 20 + 0.6Yd...
In a hypothetical economy, the aggregate consumption expenditure is given by C = 20 + 0.6Yd , where Yd is the real disposable income. In the current quarter, the net tax is T = 60, and the investment expenditure is I = 30. Government budget is balanced, meaning that the government expenditure is G = 60. Finally, net exports is N X = 0. All these variables are real values. We hold the price level fixed. Assume that, given a...
1. Given the following table, answer the following questions (6 Marks) Personal consumption expenditure C 800...
1. Given the following table, answer the following questions Personal consumption expenditure C 800 Government expenditure G 400 Taxes T 420 Export X 200 Import M 300 Gross Domestic Product Y 1800 a. The value private saving is ________ b. The value of public saving is ________ c. The value of national saving is ________ d. What is the value of gross private investment Ig? ________ e. What is the amount of investment financed by national saving? ________ f. What...
Assume the following model of the expenditure sector: C = 1000 +.7 (Y-T) Consumption Function T...
Assume the following model of the expenditure sector: C = 1000 +.7 (Y-T) Consumption Function T = 300+ .2985 Y Tax Function I = 500 – 50 r Investment Function G = 2000 Government Expenditures NX = - 1500 Net Exports Md/P = .5 Y -50 r Demand for Money Ms/P = 1000 Money Supply a- Calculate the multiplier for this economy. (Use two decimal points) b- Drive the “IS” and “LM” equations for this economy. c- Fiscal policy authorities...
What is included in the valuation of Inventory? What expenditures are included in Inventory?
What is included in the valuation of Inventory? What expenditures are included in Inventory?
How much does household weekly income affect the household weekly expenditure on food? The following data...
How much does household weekly income affect the household weekly expenditure on food? The following data shows household weekly expenditure on food and the household weekly income (all in dollars). Use the data below to develop an estimated regression equation that could be used to predict food expenditure for a weekly income. Use Excel commands for your calculations. FOOD INCOME y x 91 292 148 479 107 428 146 766 243 1621 312 1661 243 1292 272 1683 349 1808...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT