Suppose that John allocates $10,000 of his disposable income for necessities. Any additional income beyond that is both spent and saved. Assume he has a disposable annual income of $50,000 and an MPC=0.8. Based on this information the amount of money John should save would be:
A. $10,000.
B. $40,000.
C. $12,000.
D. $8,000.
D. $8,000.
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The cross elasticity of demand for butter and margarine is likely to be
A) positive because they are substitutes. B) positive because they are complements. C) negative because they are substitutes. D) negative because they are complements. E) positive because they are normal goods.
A rent ceiling set above the equilibrium rent has no effect
Indicate whether the statement is true or false
Use the above figure. The profit-maximizing or loss minimizing output and price will be
A) Q1 and P2. B) Q2 and P3. C) Q3 and P3. D) Q4 and P1.
The retirement poverty problem is that
A. retirement makes people feel poorer because they are not engaged in productive work. B. without Social Security payments, almost all seniors would be in poverty. C. many workers are too poor to save for retirement. D. many retired people live in poverty.