If the marginal propensity to save is 0.1 and government spending is raised by $5 billion, then total aggregate spending will rise by:
A. $500 million.
B. $5 billion.
C. $10 billion.
D. $50 billion.
D. $50 billion.
You might also like to view...
The basic data source to track the number of unemployed comes from a calculation of applications for new unemployment benefits
a. True b. False Indicate whether the statement is true or false
Explain what economists mean when they say that the United States is a net debtor nation. Identify a potential problem and a positive aspect associated with this status.
What will be an ideal response?
Indexing Social Security payments is done using the:
A. PPI. B. RPI. C. CPI. D. GDP deflator.
If a price ceiling is imposed, then:
A. the market supply curve will shift to the right. B. the market demand will shift to the left. C. a shortage of product will result. D. the market equilibrium price is below the level the government wishes to achieve.