The marginal propensity to save is 0.2. Equilibrium GDP will decrease by $50 billion if aggregate expenditures schedule decrease by:
A. $10 billion
B. $15 billion
C. $16 billion
D. $40 billion
A. $10 billion
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Suppose that you intend to invest $10,000 in one-year government bonds. You are looking for the highest return on your investment and do not care whether you invest in the United States or Japan, but as a U.S
resident, you want your investment return to be in U.S. dollars. Assume the current interest rate on one-year government bonds is 3% in the United States and 7% in Japan, the current exchange rate is ¥100 = $1, and the expected exchange rate in one year is ¥110 = $1. a. What is your return on Japanese bonds? b. Would you have been better off investing in Japanese bonds or U.S. bonds? Explain. c. For the interest parity condition to hold, what would have to happen to the interest rate on Japanese bonds, assuming all other data remains the same?
The impact of higher taxes would be examined by
A) a microeconomist. B) a macroeconomist. C) both a macroeconomist and a microeconomist. D) neither a macroeconomist nor a microeconomist.
How are the fundamental economic decisions determined in Cuba?
A) Individuals, firms, and the government interact in a market to make these economic decisions. B) These decisions are made by the country's elders who have had much experience in answering these questions. C) The government decides because Cuba is a centrally planned economy. D) The United Nations decides because Cuba is a developing economy.
A movement along the demand curve for toothpaste would be caused by
A) a change in the price of toothbrushes. B) a change in consumer income. C) a change in the price of toothpaste. D) a change in population.