Nama : Gracelia Paramesthi Samekto

Kelas :C
NIM : 042011133199
Mata Kuliah : Ekonomi Makro

[ Samuelson 19th ed. chapter 21 p.426-427 ]

Question For Discussion

1. Summarize the budget patterns for food, clothing, luxuries, and saving.
Answer :
A budget is the monetary expression of the expenses and income. The budget pattern of
the various products shows the pattern of income and consumption of various
commodities.
The pattern of income and consumption patterns of different households. Initially, as
the income increases the consumption of food items increases but there is a limit on the
increase in consumption of food items. When there is more increase in income, the
money spends on food declines.
There is an increase in the consumption of clothes as income increases because as the
income increases the standard of living of the people increase and people start spending
more on their appearance. As the income increases the consumption that is the total
spending on luxury items also increases because of an increase in the standard of living
of the people, people have more money to spend on luxuries. As the income increases,
there is also an increase in the savings of the people as savings in itself are a luxury.

Jawaban :
Anggaran adalah ekspresi moneter dari pengeluaran dan pendapatan. Pola anggaran
berbagai produk menunjukkan pola pendapatan dan konsumsi berbagai komoditas.
Pola pendapatan dan pola konsumsi rumah tangga berbeda. Awalnya, karena
pendapatan meningkatkan, konsumsi makanan barang-barang meningkat, tetapi ada
batasan peningkatan konsumsi makanan. Ketika ada lebih banyak peningkatan
pendapatan, uang yang dihabiskan untuk makanan menurun.
Ada peningkatan konsumsi pakaian karena pendapatan meningkat. Ketika pendapatan
meningkatkan standar hidup, orang-orang mulai menghabiskan lebih banyak uang
untuk penampilan mereka. Ketika pendapatan meningkatkan konsumsi, total
pengeluaran untuk barang-barang mewah juga meningkat karena peningkatan standar
hidup masyarakat, orang memiliki lebih banyak uang untuk dibelanjakan untuk
kemewahan. Ketika pendapatan meningkat, ada juga peningkatan tabungan rakyat
karena tabungan itu sendiri adalah kemewahan.
2. In working with the consumption function and the investment demand schedule, we
need to distinguish between shifts of and movements along these schedules.

a. Define carefully for both curves changes that would lead to shifts of and those that
would produce movements along the schedules.
b. For the following, explain verbally and show in a diagram whether they are shifts of
or movements along the consumption function; increase in disposable income,
decrease in wealth, fall in stock prices.
c. For the following, explain in words and show in a diagram whether they are shifts
of or movements along the investment demand curve; expectation of a decline in
output next year, rise of interest rates, increase in taxes on profits.

Answer :

a. The shift in the consumption curve is due to factors that affect income, such as
income tax. The decrease in income tax resulted in an increase in income to be
followed by increased consumption, so the consumption curve will shift to the left.
Instead, an income tax increase would result in the consumption curve shifting to
the right.
The shift in investment curve is due to factors that affect income, such as output,
expectations, and income tax. The decrease in income tax results in an increase in
investment, so the investment curve will shift to the right. Instead, an income tax
increase would result in an investment curve shifting to the left. High output results
in increased investment demand, so the curve shifts to the right. In contrast, the
decrease in output resulted in declining investment demand, resulting in a curve
shifting to the left.
The shift along the curve is due to changes in the amount of consumption and
investment as income changes.

b. The increase in disposable income will cause a movement along the consumption
function curve because an increase in disposable income will lead to changes in
consumption and savings rates.
The decrease in wealth will cause the consumption curve or investment curve to
shift because the decrease in wealth is a factor beyond the variable functions of
consumption and investment.
A drop in the stock price will cause the investment curve to shift as changes in the
share price lead to changes in investment patterns and lead to changes in the
number of investments and the rate of return on receipts.
c. The expected decline in output will lead to a shift in the investment demand curve
as people will hold back on investing caused by the expected decline in output.
An increase in interest rates will cause a shift in the investment demand curve
because interest rates are variables in the investment function.
An increase in tax on profits can lead to a shift in the investment demand curve as it
makes the resulting profit decrease, so the amount of investment will change.

Jawaban :
a. Pergeseran kurva konsumsi berupa perpindahan kurva yang disebabkan oleh faktor-
faktor yang mempengaruhi pendapatan, misalnya pajak penghasilan. Penurunan
pajak penghasilan mengakibatkan peningkatan pendapatan yang akan diikuti oleh
peningkatan konsumsi, sehingga kurva konsumsi akan bergeser ke kiri. Sebaliknya,
kenaikan pajak penghasilan akan mengakibatkan kurva konsumsi bergeser ke
kanan.
Pergeseran kurva investasi berupa perpindahan kurva yang disebabkan oleh faktor-
faktor yang mempengaruhi pendapatan, antara lain output, ekspetasi, dan pajak
penghasilan. Penurunan pajak penghasilan mengakibatkan peningkatan investasi,
sehingga kurva investasi akan bergeser ke kanan. Sebaliknya, kenaikan pajak
penghasilan akan mengakibatkan kurva investasi bergeser ke kiri. Output yang
tinggi mengakibatkan permintaan investasi meningkat, sehingga kurva bergeser ke
kanan. Sebaliknya, penurunan output mengakibatkan permintaan investasi
menurun, sehingga kurva bergeser ke kiri.
Pergeseran di sepanjang kurva disebabkan oleh perubahan jumlah konsumsi dan
investasi seiring perubahan pendapatan.

b. Peningkatan disposable income akan menyebabkan pergerakan sepanjang kurva

fungsi konsumsi karena peningkatan disposable income akan menyebabkan
perubahan tingkat konsumsi dan tabungan.
Penurunan kekayaan akan menyebabkan kurva konsumsi atau kurva investasi
bergeser karena penurunan kekayaan adalah faktor di luar variable fungsi konsumsi
dan investasi.
Penurunan harga saham akan menyebabkan kurva investasi bergeser karena
perubahan harga saham menyebabkan perubahan pola investasi dan menyebabkan
perubahan jumlah investasi dan tingkat pengembalian penerimaan.
c. Ekspetasi penurunan pada output akan menyebabkan bergesernya kurva permintaan
investasi karena orang akan menahan untuk berinvestasi yang disebabkan oleh
ekspetasi penurunan output.
Kenaikan suku bunga akan menyebabkan pergeseran pada kurva permintaan
investasi karena suku bunga merupakan variable yang ada di dalam fungsi investasi.
Kenaikan pajak pada keuntungan dapat menyebabkan bergesernya kurva
permintaan investasi karena membuat profit yang dihasilkan menurun, sehingga
jumlah investasi akan berubah.
3. Exactly how were the MPC and MPS in Table 21-4 computed? Illustrate by calculating
MPC and MPS between points A and B. Explain why it must always be true that MPC
+ MPS = 1.

Answer :
MPC (Marginal Propensity to Consume) is a comparison between changes in
consumption and changes in income. The way to calculate MPC on tables 21-4 point A
and B is to compare changes in consumption expenditure and disposable income
∆C 25,000−24,200 800
changes. MPC = = = = 0.8
∆ YD 25,000−24,000 1,00
MPS (Marginal Propensity to Saving) is a comparison between the differences in the
amount of savings to the difference in disposable income. The way to calculate MPS on
table 6-4 point A and B is to compare net saving with disposable income.
∆S 200
MPS = = = 0.2
∆ YD 1,000
MPC + MPS = 1 is always be true because when a person gets an increase in income,
there are only 2 ways to spend the increase in income, by increasing consumption or
increasing savings. So that the equation can be ∆Y= ∆C+ ∆S, if both fields are divided
∆Y ∆C ∆S
by ∆Y will be obtained = + . Thus, it is proven that MPC + MPS = 1 is
∆Y ∆Y ∆Y
always be true

Jawaban :
MPC (Marginal Propensity to Cosume) adalah perbandingan antara perubahan
konsumsi dengan perubahan pendapatan. Cara menghitung MPC pada table 6-4 point A
dan B adalah dengan membandingkan perubahan consumption expenditure dan
perubahan disposable income.
∆C 25,000−24,200 800
MPC = = = = 0.8
∆ YD 25,000−24,000 1000
MPS (Marginal Propensity to Saving) adalah perbandingan antara selisih jumlah
tabungan terhadap selisih disposable income. Cara menghitung MPS pada table 6-4
point A dan B adalah dengan membandingkan net saving dengan disposable income.
∆S 200
MPS = = = 0.2
∆ YD 1,000
Selalu benar bahwa MPC + MPS = 1 karena ketika seseorang mendapatkan kenaikan
pendapatan, maka hanya ada 2 cara menghabiskan kenaikan pendapatan tersebut, yaitu
dengan meningkatkan konsumsi atau meningkatkan tabungan. Sehingga dapat
dituliskan persamaan ∆ Y =∆ C+ ∆ S , jika kedua ruas dibagi dengan ∆ Y maka
∆Y ∆C ∆S
didapatkan = + . Dengan demikian terbukti bahwa selalu benar bahwa
∆Y ∆Y ∆Y
MPC + MPS = 1.
4. I consume all my income at every level of income. Draw my consumption and saving
functions. What are my MPC and MPS?

Sample Data :

Year Disposable Income Consumption Saving

2018 $100 $100 0
2019 $150 $150 0
2020 $200 $200 0

Consumption and Saving Function

250
Consumption and Saving

200

150

100

50

0
50 100 150 200

Answer :
When I get an increase in income, there are only 2 ways to spend it, by increasing
consumption or increasing saving. If I consume all my income at every level of income,
then MPC = 1 and MPS = 0.
 Jawaban :
Ketika saya mendapatkan kenaikan pendapatan, maka hanya ada 2 cara menghabiskan
kenaikan pendapatan tersebut, yaitu dengan meningkatkan konsumsi atau
meningkatkan tabungan. Jika saya menghabiskan seluruh pendapatannya untuk
konsumsi, maka MPC = 1 dan MPS = 0.

5. Estimate your income, consumption, and saving for last year. If you dissaved
(consumed more than your income), how did you finance your dissaving? Estimate the
composition of your consumption in terms of each of the major categories listed in
Table 21-1.

Category of Consumption Value of Consumption Percent of

($, billion,2007) Total
Durable Goods 700 8.32%
Motor vehicles and part 400
Furniture and household equipment 200
Other 100
Nondurable Goods 2,400 28.23%
Food 1,300
Clothing and shoes 200
Energy goods 300
Other 600
Services 5,400 63.52%
Housing 1,400
House-hold operation 500
Transportation 300
Medical care 1,600
Recreation 400
Other 1,200
Total personal consumption 8,500 100.0%
expenditures
Income 7,500

Answer :
Assume that the income is 7,500 and the total personal consumption is 8,500 (deficit
1,500). To finance my dissaving, it can be done by using loan money, using existing
savings, and selling the assets that I have.
Jawaban :
Asumsikan pendapatan sebesar 7,500 dan total pengeluaran sebesar 8,500 (defisit
1,500). Untuk mendanai dissaving, bisa dilakukan dengan cara meminjam uang kepada
 orang lain (utang), menggunakan tabungan yang ada, dan menjual asset yang kita
punya.

6. “Along the consumption function, income changes more than consumption.” What does
this imply for the MPC and MPS?

Year Income Consumptio Saving MPC MPS

($) n ($) ($)
2017 100 75 25 (1) dan (2) = 0.75 (1) dan (2) = 0.25
2018 200 150 50 (2) dan (3) = 0.5 (2) dan (3) = 0.5
2019 300 200 100 (3) dan (4) = 1 (3) dan (4) = 0
2020 400 300 100

Answer :
There is a relationship between the level of consumption expenditure and the level of
disposable personal income in the consumption function. There are 2 changes in
income, namely increase and decrease. The level of consumption expenditure increases
when people’s income increases. The otherwise, the level of consumption expenditure
decreases when people’s income decreases. The results of consumption changes more
than saving is the value MPC decreases and the value of MPS increases. However, it
doesn’t effect the total of MPC and MPS (MPC + MPS = 1).

Jawaban :
Dalam fungsi konsumsi, terdapat hubungan antara tingkat pengeluaran konsumsi
dengan tingkat pendapatan yang siap dipakai. Perubahan pendapatan ada 2, yaitu
meingkat dan menurun. Semakin tinggi pendapatan masyarakat, tingkat konsumsi akan
semakin tinggi. Sebaliknya, semakin rendah pendapatan masyarakat semakin rendah
pula tingkat konsumsinya. Jika konsumsi berubah lebih banyak dari saving, akibatnya
adalah MPC menurun dan MPS meningkat. Namun, hal ini tidak mempengaruhi total
keseluruhan MPC dan MPS, yaitu MPC + MPS = 1.

7. “Changes in disposable income lead to movements along the consumption function;

changes in wealth or other factors lead to a shift of the consumption function.” Explain
this statement with an illustration of each case.

Changes in Wealth
Year
Income 1 ($) Consumption 1 ($) Income 2 ($) Consumption 2 ($)
1 1,000 750 4,000 3,000
2 1,500 1,000 6,000 4,500
3 2,000 1,500 8,000 6,000
4 2,500 2,000 10,000 7,500

8. What would be the effects of the following on the investment demand function
illustrated in Table 21-5 and Figure 21-8?
a. A doubling of the annual revenues per $1000 invested shown in column (3)
b. A rise in interest rates to 15 percent per year
c. The addition of a ninth project with data in the first three columns of (J, 10, 70)
d. A 50 percent tax on net profits shown in columns (6) and (7)

Cost per $1,000 Annual Net Profits per

Total Annual
Borrowed at Annual $1,000 Borrowed at
Projec Investment revenues
Interest Rate of : Annual Interest Rate of :
t in project per $1,000
15% 10% 5% 15% 10% 5%
($, million) invested ($)
($) ($) ($) ($) ($) ($)
A 1 1,500 150 100 50 1,350 1,400 1,450
B 4 220 150 100 50 70 120 170
C 10 160 150 100 50 10 60 110
D 10 130 150 100 50 -20 30 80
E 5 110 150 100 50 -40 10 60
F 15 90 150 100 50 -60 -10 40
G 10 60 150 100 50 -90 -40 10
H 20 40 150 100 50 -110 -60 -10
J 10 70 150 100 50 -80 -30 -20

Answer :
a. Doubling annual revenue per $1,000 will increase the income, so that it will shift
the function of investment demand to the right.
b. A 15% increase in interest rates would reduce income and result in investment
demand decreasing by $15 million compared to the 10% rate, causing the function
of investment demand to shift to the left.
c. The addition of the 9th project that suffered an overall loss will reduce the value of
the investment, resulting in the investment demand curve shift to the left.
d. A 50% tax on net profits will result in a lower net income, resulting in a decrease in
overall income and resulting in the function of investment demand shift to the left.

Jawaban :
a. Penggandaan revenue tahunan per $1,000 akan mengingkatkan income sehingga
akan menggeser fungsi permintaan investasi ke kanan.
b. Kenaikan suku bunga menjadi 15% akan semakin memperkecil income dan
mengakibatkan permintaan investasi menurun $15 juta dibanding tingkat suku
bunga 10%, sehingga menyebabkan fungsi permintaan investasi bergeser ke kiri.
c. Penambahan proyek ke 9 yang mengalami kerugian secara keseluruhan akan
mengurangi nilai investasi, sehingga mengakibatkan kurva permintaan investasi
bergeser ke kiri.
d. Pajak 50% atas net profits akan mengakibatkan net income semakin kecil, sehingga
pendapatan secara keseluruhan mengalami penurunan dan mengakibatkan fungsi
permintaan investasi bergeser ke kiri.
9. Using the augmented investment demand schedule from question 8(c) and assuming
that the interest rate is 10 percent, calculate the level of investment for cases a through
d in question 8.

10. Advanced problem : According to the life-cycle model, people consume each year an
amount that depends upon their lifetime income rather than upon their current income.
Assume that you expect to receive future income (in constant dollars) according to the
schedule in Table 21-6.

a. Assume that there is no interest paid on savings. Further assume that you want to
“smooth” your consumption (enjoying equal consumption each year) because of
diminishing extra statisfaction from extra consumption. Derive your best
consumption trajectory for the 5 years, and write the figures in column (3). Then
calculate your saving and enter the amounts in column (4); put your end-of-period
wealth, or cumulative saving, for each year into column (5). What is your average
saving rate in the first 4 years?
b. Next, assume that a government social security program taxes you $2000 in each of
your working years and provides you with an $8000 pension in year 5. If you will
desire to smooth consumption, calculate your revised saving plan. How has the
social security program affected your consumption? What is the effect on your
average saving rate in the first 4 years? Can you see why some economists claim
that social security can lower saving?

Answer :

Year Income Consumption Saving Cumulative Saving

1 30,000 10,000 20,000 20,000
2 30,000 10,000 20,000 40,000
3 25,000 10,000 15,000 55,000
4 15,000 10,000 5,000 60,000
5 0 0 0 0

20.000+ 20,000+ 15,000+5,000

a. Average saving in first 4 year = = 15,000
4

b. Sesuai Pola Konsumsi Awal

c. Disposable Cumulative
Year Income Taxes Consumption Saving
Income Saving
1 30,000 2,000 28,000 10,000 18,000 18,000
2 30,000 2,000 28,000 10,000 18,000 36,000
3 25,000 2,000 23,000 10,000 13,000 49,000
4 15,000 2,000 13,000 10,000 3,000 52,000
5 8,000 0 8,000 10,000 -2,000 50,000

Revisi Terhadap Pola Konsumsi

Disposable Revised Cumulative

Year Income Taxes Saving
Income Consumption Saving
1 30,000 2,000 28,000 6,000 22,000 22,000
2 30,000 2,000 28,000 6,000 22,000 44,000
3 25,000 2,000 23,000 6,000 17,000 61,000
4 15,000 2,000 13,000 6,000 7,000 68,000
5 8,000 0 8,000 6,000 2,000 70,000
Social security programs have an effect on the decline in disposable income which results in
a decrease in consumption, so that the consumption needs to be revised in order to keep
saving every year.

The first 4-year average saving decreased to

18,000+ 8,000+13,000+3,000
= = 13,000
4

Yes, the data proves that the social security program resulted in a decrease in savings.

Social security program berpengaruh pada penurunan disposable income yang

selanjutnya berakibat pada penurunan consumption, sehingga konsumsi perlu direvisi
agar bisa tetap menabung setiap tahunnya.

Average saving 4 tahun pertama mengalami penurunan menjadi

18,000+ 8,000+13,000+3,000
= = 13,000
4

Ya, dari data tersebut membuktikan bahwa social security program berakibat pada
penurunan saving.

Chapter 22 p. 451-452 (question no. 4 – 8)

4. In the sample multiplier model, assume that investment is always zero. Show that
equilibrium output in this special case would come at the break-even point of the
consumption function. Why would equilibrium output come above the break-even point
when investment is positive?
 Answer :
When investment is positive, equilibrium is above break-even point because the
increase in investment will result in an increase in output or GDP which will be
followed by a rise in consumption so that the equilibrium point is above it.
Jawaban :
Ketika investasi positif, ekuilibrium berada di atas titik impas karena kenaikan investasi
akan berakibat pada peningkatan output atau PDB yang akan diikuti oleh kenaikan
konsumsi sehingga titik ekuilibrium berada di atasnya.

5. Define carefully what is meant by equilibrium in the multiplier model. For each of the
following, state why the situation is not an equilibrium. Also describe how the economy
would react to each of the situations to restore equilibrium.
a. In Table 22-2, GDP is $3300 bilion.
b. In figure 22-7, actual investment is zero and output is at M.
c. Car dealers find that their inventories of new cars are rising unexpectedly.

Answer :

The equilibrium in the multiplier model occurs when the output produced is the same as
the aggregate supply and aggregate demand equilibrium.

a. In the GDP level of $3.300 billion, it is below the equilibrium point because the
GDP or output produced has not been able to meet demand, so to achieve
equilibrium must increase production, thus corresponding to the total expenditure
(C+I), so to achieve equilibrium must increase production to match the total
planned expenditure. In other words, economists should expand.
b. If the actual investment = 0 will result in a decrease in the total planned expenditure
(C+I+G) and the equilibrium point will change at the point of GDP = $1.300 billion
or the economy contracts.
c. The unexpected increase in new car inventories will result in manufacturers
reducing their production capacity to fit the spending plan, resulting in an
equilibrium balance.

Jawaban :

Ekuilibrium dalam model multiplier terjadi pada saat output yang dihasilkan sama
dengan ekuilibrium aggregate supply dan aggregate demand.

a. Pada tingkat GDP $3,300 milyar, berada di bawah titik equilibrium karena GDP
atau output yang dihasilkan belum bisa memenuhi permintaan, sehingga untuk
mencapai equilibrium harus menaikkan produksi, sehingga sesuai dengan total
pengeluaran (C+I), sehingga untuk mencapai equilibrium harus menaikkan
produksi agar sesuai dengan total pengeluaran yang direncanakan. Dengan kata lain
harus melakukan ekspansi ekonom.
 b. Jika investasi aktual = 0 maka akan berakibat pada penurunan total belanja yang
direncanakan (C+I+G) dan titik equilibrium akan berubah pada titik GDP = $1,300
milyar atau perekonomian mengalami kontraksi.
c. Kenaikan tak terduga persediaan mobil baru akan mengakibatkan produsen
mengurangi kapasitas produksinya agar sesuai dengan rencana pengeluaran,
sehingga terjadi keseimbangan ekuilibrium.

6. Reconstruct Table 22-2 assuming that planned investment is equal to (a) $300 bilion
and (b) $400 billion. What is the resulting difference in GDP? Is this difference greater
or smaller than the change in I? Why?
Answer :
a. Planned Investment is Equal to $300 bilion

Total Planned
Resulting
Level of GDP Planned Planned Planned Consumption
GDP Tendency of
and DI Consumption Saving Investment and
Output
Investment
4,200 3,800 400 300 4,200 > 4,100 Contraction
3,900 3,600 300 300 3,900 = 3,900 Equilibrium
3,600 3,400 200 300 3,600 < 3,700 Expansion
3,300 3,200 100 300 3,300 < 3,500 Expansion
3,000 3,000 0 300 3,000 < 3,300 Expansion
2,700 2,800 -100 300 2,700 > 2,100 Contraction
The difference in GDP = $3,900 - $3,600 = $300 billion. A $300 billion increase in
GDP equals to $300 increase in investment.

Perbedaan GDP = $3,900 - $3,600 = $300 milyar. Kenaikan GDP $300 milyar sama
dengan kenaikan investasi sebesar $300.

b. Planned Investment is Equal to $400 bilion

Total Planned
Resulting
Level of GDP Planned Planned Planned Consumption
GDP Tendency of
and DI Consumption Saving Investment and
Output
Investment
4,200 3,800 400 400 4,200 = 4,200 Equilibrium
3,900 3,600 300 400 3,900 < 4,000 Expansion
3,600 3,400 200 400 3,600 < 3,800 Expansion
3,300 3,200 100 400 3,300 < 3,600 Expansion
3,000 3,000 0 400 3,000 < 3,700 Expansion
2,700 2,800 -100 400 2,700 < 3,200 Expansion

The difference in GDP = $4,200 - $3,600 = $600. The $200 increase in investment
resulted in a $600 billion increase in GDP or triple increase. This indicates the
multiplier effect in the increase in investment.
 Perbedaan GDP = $4,200 - $3,600 = $600. Kenaikan investasi $200 berakibat pada
kenaikan GDP sebesar $600 milyar atau naik 3x lipat. Hal tersebut menunjukkan efek
multiplier dalam kenaikan investasi.

When I drops from $200 billion to $100 billion, how much must GDP drop?

Answer :

Total Planned
Resulting
Level of GDP Planned Planned Planned Consumption
GDP Tendency of
and DI Consumption Saving Investment and
Output
Investment
4,200 3,800 400 100 4,200 = 3,900 Equilibrium
3,900 3,600 300 100 3,900 < 3,700 Expansion
3,600 3,400 200 100 3,600 < 3,500 Expansion
3,300 3,200 100 100 3,300 < 3,500 Expansion
3,000 3,000 0 100 3,000 < 3,100 Expansion
2,700 2,800 -100 100 2,700 < 2,700 Expansion

When I drops from $200 billion to $100 billion, GDP should drop by $300 billion. In
other words, a $100 billion drop in investment resulted in a $300 billion drop in GDP, a
multiplier of effects that tripled.
Pada saat investasi turun dari $200 milyar ke $100 milyar maka GDP harus turun
sebesar $300 milyar. Dengan kata lain, penurunan investasi $100 milyar berakibat pada
penurunan GDP $300 milyar, multiplier efeknya 3x lipat.

7. Give (a) the common sense, (b) the arithmetic, and (c) the geometry of the multiplier.
What are multipliers for MPC = 0.9? 0.8? 0.5?
Answer :
a. Common sense multiplier: changes in variables affecting GDP will affect the ups
and downs of GDP. For variables whose nature is exogenous is determined by an
outside party, in this case investment. The relationship is not as linear as other
variables, such as consumption and saving, so the multiplier effect of investment on
GDP needs to be measured.
b.
1 1
c. Multiplier = =
MPS 1−MPC

1
Multiplier MPC → 0.9 = = 10
1−0.9

1
0.8 = =5
1−0.8
 1
0.5 = =2
1−0.5

1
Multiplier MPS → 0.1 = = 10
0.1

1
0.8 = =5
0.8

Jawaban :
a. Common sense multiplier : perubahan variable-variabel yang mempengaruhi GDP
akan berpengaruh pada naik turunnya GDP. Untuk variable yang sifatnya
exogenous ditentukan oleh pihak luar, dalam hal ini investasi. Hubungannya tidak
se-linear variable lain, misalnya consumption dan saving, sehingga efek multiplier
investasi terhadap GDP perlu diukur.
b.
1 1
c. Multiplier = =
MPS 1−MPC

1
Multiplier MPC → 0.9 = = 10
1−0.9

1
0.8 = =5
1−0.8

1
0.5 = =2
1−0.5

1
Multiplier MPS → 0.1 = = 10
0.1

1
0.8 = =5
0.8

8. Explain in words and using the notion of expenditure rounds why the tax multiplier is
smaller than the expenditure multiplier.
Answer :
The tax multiplier is smaller than the expense multiplier. This is because the entire
increase in government spending is aimed at increasing aggregate demand, but only a
portion of the increase in spendable income (which results in lower taxes) is consumed.
The multiple effects of a tax cut can be influenced by the size of the tax cut, the
marginal propensity to consume and the crowding out effect.
Jawaban :
Pengganda pajak lebih kecil daripada pengganda pengeluaran. Hal ini karena seluruh
peningkatan pengeluaran pemerintah ditujukan untuk meningkatkan permintaan
aggregate, tetapi hanya sebagian dari peningkatan pendapatan yang dapat dibelanjakan
(yang menghasilkan pajak yang lebih rendah) yang dikonsumsi. Efek pengganda dari
pemotongan pajak dapat dipengaruhi oleh ukuran pemotongan pajak, kecenderungan
marjinal untuk mengonsumsi serta efek crowding out.