Assume that the MPC is 0.80 and investment rises by $50 million. How much additional saving will this generate in the second round of spending?
A. $10 million
B. $40 million
C. $50 million
D. $62.5 million
E. $250 million
Answer: A
You might also like to view...
Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
As additional units of labor hours are employed, holding all other factors constant, along the production function,
A) nominal GDP decreases at an increasing rate. B) real GDP increases at an increasing rate. C) real GDP increase at a constant rate. D) real GDP initially decreases and then starts to increase. E) real GDP increases at a decreasing rate.
Robinson spends all his income on mangos and bananas. Mangos cost $3 per pound and bananas cost $1 per pound. The marginal utility is 30 for the last pound of mangos purchased and 8 for the last pound of bananas
To maximize his utility, Robinson should buy A) more mangos and fewer bananas. B) more bananas and fewer mangos. C) the present combination of goods. D) only bananas.
If the expected inflation rate was 2.5%, the expected real interest rate was 4.0%, and the real interest rate turned out to be 5.1%, then the nominal interest rate equals
A) 1.4%. B) 1.5%. C) 2.6%. D) 6.5%.