The primary determinant of the level of consumption and saving in the economy is the:
a. Level of income
b. Interest rate
c. Level of prices
d. Level of investment
Answer: a. Level of income
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Taxes constant
What will be an ideal response?
The level of aggregate expenditure in the private closed Economy is determined by the
A) expenditures of consumers and businesses. B) intersection of the saving schedule and the 45-degree line. C) equality of the MPC and MPS. D) intersection of the saving and consumption schedules.
The equilibrium price in a market is found where
A. The market demand curve intersects the y-axis. B. The market supply curve intersects the market demand curve. C. The market supply curve intersects the y-axis. D. The market supply curve intersects the x-axis.
Suppose that the nominal rate of interest is holding steady at 2 percent even as the anticipated rate of inflation rises. What is happening to the real rate of interest?
A) It is unchanged. B) It is increasing. C) It is decreasing. D) It equals the nominal interest rate.