If households save $40 billion less at each level of income and the marginal propensity to consume (MPC) is 0.8, the aggregate expenditure line will _____
a. intersect the 45-degree line at a real GDP of $40 billion
b. shift upward by $40 billion
c. shift downward by $40 billion
d. shift upward by $200 billion because of the multiplier mechanism
e. shift downward by $200 billion because of the multiplier mechanism
b
You might also like to view...
Explicit costs are measured in dollars
Indicate whether the statement is true or false
Tom and Di grow tomatoes and turnips. Tom has a comparative advantage in growing tomatoes if ________
A) Tom can grow more tomatoes than Di can B) his opportunity cost of tomatoes is less than Di's opportunity cost of tomatoes C) his opportunity cost of tomatoes is less than his opportunity cost of turnips D) his marginal benefit from tomatoes is greater than Di's
Goods with upward sloping demand curves are referred to as
A) luxury goods. B) substitute goods. C) Giffen goods. D) Marshall goods.
Shocks and Integration) Using the graph, which of the following has the highest degree of market integration with the other countries?
A) Peru and Colombia B) Peru and Uruguay C) Venezuela and Uruguay D) Venezuela