If Y = $500 billion, autonomous consumption = $300 billion, and the marginal propensity to save = 0.20, then saving will equal
a. –$200 billion
b. $200 billion
c. –$100 billion
d. $100 billion
e. $40 billion
A
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Which of the following represents a function of money?
A) standard of deferred payment B) medium of exchange C) unit of accounting D) all of the above
An increase in demand will have what effect on equilibrium price and quantity?
A. Price will increase; quantity will decrease. B. Price will decrease; quantity will increase. C. Both price and quantity will increase. D. Both price and quantity will decrease.
The logic of why international trade increases well-being is
A. a major revision of the logic of why trade within a country increases well-being. B. completely different from the logic of why trade within a country increases well-being. C. a narrow, special case of the logic of why trade within a country increases well-being. D. no different from the logic of why trade within a country increases well-being.