A hypothetical open economy has a marginal propensity to import (MPI) equal to 0.2 and a marginal propensity to consume equal to 0.7 . Assume that the economy is initially in equilibrium. What is the marginal propensity to save of this economy?
a. 0.2
b. 0.3
c. 0.7
d. 0.9
e. 0.6
b
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When did the United States register its lowest unemployment rate?
A) in the 1920s B) in the economic boom of the 1990s C) in the Roaring Nineties (1890s) D) at the end of World War II
If we wanted to describe unemployment in terms of supply and demand, we could say:
A. the quantity of those demanding labor is greater than those supplying labor. B. there is a surplus of labor. C. at the prevailing wage, the demand is greater than the supply of labor. D. All of these are true.
The golden rule of profit maximization states that any firm maximizes profit by producing where
a. demand is unit elastic, and total revenue is greatest b. price equals average revenue c. price equals marginal revenue d. price equals marginal cost e. marginal revenue equals marginal cost
What is the difference between an autonomous increase in consumption and an induced increase in consumption? Give an example of each