Search
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

# Personal Income and Its Disposition - Research Paper Example

Summary
In the paper “Personal Income and Its Disposition” the author provides the individual assignment regarding personal income and its disposition. He obtained the needed figures (in billions) for the 2nd quarter of 2011 such as the Nominal Personal Income, Nominal Disposable Personal Income…

## Extract of samplePersonal Income and Its Disposition

Download file to see previous pages... Marginal Propensity to Consume or MPC shows the relationship between the change in consumption and change in income (Baumol and Blinder 535). Thus, I computed MPC by dividing the change in Nominal Personal Consumption Expenditures by the change in Nominal Personal Disposable Income (MPC= change in Nominal Personal Consumption Expenditures/ change in Nominal Personal Disposable Income). And to get the changes in both the Nominal Personal Consumption Expenditures and Nominal Personal Disposable Income, I utilized the figures provided for the 1st and 2nd quarters of 2011 (MPC = Nominal Personal Consumption Expenditures 2nd quarter 2011- Nominal Personal Consumption Expenditures 1st quarter 2011/ Nominal Personal Disposable Income 2nd quarter 2011 - Nominal Personal Disposable Income 1st quarter 2011). Substituting the figures in this formula, change in Nominal Personal Consumption Expenditures (\$10 676B- \$10 571.7B) is equal to \$104.3B and change in Nominal Personal Disposable Income (\$11 591.5B- \$ 11 481B) is equal to \$110.5B. Dividing the changes (\$104.3B/ \$110.5B), MPC is equal to 0.94. Without long computations and just using the economic formula, MPC + MPS = 1, I can infer that Marginal Propensity to Save or MPS is 1- 0.94 or simply 0.06. To check my answer, I performed the long computation. Marginal Propensity to Save or MPS tells us about the relationship of change in savings and change in income. It is computed by dividing the change in Nominal Personal Savings by the change in Nominal Personal Disposable Income. Again, I used both the figures provided by the table for the 1st and 2nd quarters of 2011. Change in Nominal Personal Savings is equal to Nominal Personal Savings 2nd quarter 2011- Nominal Personal Savings 1st quarter 2011. Substituting the figures, \$588.9B- \$578.9B, results in a change of \$10B. After dividing this change by the change in Nominal Personal Disposable Income of \$110.5B, MPS is equal to 0.09. Average Propensity to Consume (APC) is computed by using almost the same formula with MPC, the difference is rather than using changes in consumption and income, this time total consumption and total income will be used. This means that Nominal Personal Consumption Expenditure 2nd quarter of 2011(\$10 676B) will be divided by the Nominal Personal Income 2nd quarter of 2011(\$12 922.6B). This results in an APC of 0.83. Average Propensity to Save (APS) also uses the same rule as APC in its computation. It is determined not by using the changes in savings and income but by the total income and savings. Therefore, dividing the Nominal Personal Savings of 2nd quarter of 2011 which is \$588.9B by the Nominal Personal Income of 2nd quarter of 2011 which is \$12 922.6B, APS is equal to 0.05. Recessionary gaps are closed by the governments by means of fiscal policy. This comes in either changing the government spending or changing the taxes or changing both the government spending and taxes (Baumol and Blinder 559). In this case, if fiscal policymakers will close the recessionary gap of \$17.38B by changing the government spending, there should be an increase of \$1.04B. ...Download file to see next pagesRead More
Cite this document
• APA
• MLA
• CHICAGO
(“Personal Income and Its Disposition Research Paper”, n.d.)
Retrieved de https://studentshare.org/macro-microeconomics/1392385-research-paper
(Personal Income and Its Disposition Research Paper)
https://studentshare.org/macro-microeconomics/1392385-research-paper.
“Personal Income and Its Disposition Research Paper”, n.d. https://studentshare.org/macro-microeconomics/1392385-research-paper.
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
The personal income and wealth levels in the United Kingdom
It has been suggested over time that personal income and wealth levels have become skewed to favour those at the top. Consequently, wealth levels have increased in significant amounts for people who were already at the top tiers of personal income and wealth.
7 Pages(1750 words)Essay
Analysis of Economic Indicators: Retail Sales and Personal Income
Personal income does not usually rise fast enough to absorb increases in interest rates. This is more likely to be an issue for people whose budgets are already stretched, since people with lower credit scores or worse ratios of income to expense are more likely to have to resort to variable rate loans in order to qualify for the credit they want, and these are the very loan payments which will rise with interest rates, forcing these consumers to make compensatory budget adjustments.
2 Pages(500 words)Essay
Real Consumer Expenditure and Real Disposable Personal Income
After having sorted the data, a graph was generated using Microsoft Excel as shown above. From the graph we can see that the Consumption Expenditures generally increased. What is interesting to note is that the trend was characterized better by an exponential fit rather than by any other curve fits.
4 Pages(1000 words)Research Paper
Retail Sales and Personal Income

The author states that bloomberg forecast a growth rate of 3.7% in personal income for 2006. The website Financial Forecast Center, which claims to use forecasting methods “rooted in engineering, not economics” by analyzing macroeconomic factors as “complex systems” using “artificial intelligence” produced an annualized forecast of 3.66%.

2 Pages(500 words)Essay
Family Income And Its Impact On Providing Healthy Choices
They conducted a survey of children of 12.5 mean age and then repeated it three years later when the children had become young adolescents of 15.5 mean age. They discovered that there was a direct relationship between family income and provision of healthy dietary choices, with both being directly proportional to each other.
2 Pages(500 words)Essay
Personal Income Tax and Revenue Forecasting
In late 1997 the country initiated a personal income tax, heavily dependent on taxes withheld by large employers on wages and salaries, but still broad in coverage. The country has been collecting about 30 percent of its tax revenue from that tax, although
4 Pages(1000 words)Assignment
Personal financing , income tax
Failure to do this will result in a financial debt that sometimes can grow to unmanageable levels. Mohammed has a yearly income of \$48000 and he must add to
1 Pages(250 words)Assignment
Personal Income Tax and Revenue Forecasting
The pattern as shown in the past three year’s revenue collection reveals that revenue amount rises each month from the previous month in a large portion of the fiscal year. Also, the revenue collection pattern shows a trend of
5 Pages(1250 words)Research Paper
Personal Income Taxes
The major reason for this decrease is the low income tax rates on the investment income. Mike: Apparently, this may not be the first platform that is discussing the drop in tax rates of the rich. This scenario is the result of the
2 Pages(500 words)Essay
Personal Income Statistics
Conversely, the prevailing 1% possessed a staggering 1.62.Moreover, every quintile was below one. 1.62 was top with 1%.1.33 for the fifth quintile, 0.84 in the fourth quintile, 0.64 in
1 Pages(250 words)Statistics Project
Let us find you another Research Paper on topic Personal Income and Its Disposition for FREE!
+16312120006