Consider the Following Multiplier Model Diagram

question 13

Essay

Consider the following multiplier model diagram:
For each of the following,draw a picture to show what would happen to the equilibrium level of income in the economy.
(a)Consumer sentiment about the future improves resulting in an increase in autonomous consumption of 100.
(b)Foreign economic activity rises,which results in an increase in autonomous exports of 100.
(c)Because the average life span increases,many people are saving more of their income than ever before.Consequently the mpe falls from 0.75 to 0.66.

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Definitions:

American Gothic

A painting by Grant Wood from 1930, depicting a farmer and his daughter standing in front of a house styled in the Carpenter Gothic architectural mode.

Regionalism

A 20th-century American art movement that portrayed American rural life in a clearly readable, Realist style. Major Regionalists include Grant Wood and Thomas Hart Benton.

Grant Wood

An American painter best known for his depictions of the rural American Midwest, particularly the painting "American Gothic."

Chrysler Building

An iconic Art Deco skyscraper located in New York City, known for its distinctive terraced crown and once the world's tallest building.