If the average propensity to consume is initially 0.8, the marginal propensity to consume is 0.75, and real disposable income increases by $1000, the new value of saving is
A) $200.
B) $250.
C) $800.
D) $750.
B
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Assume the retiree had a third option: receive a lump sum of $750,000 five years from now. If the interest rate is 4 percent, approximately how much is the future $750,000 to be received in 5 years worth today?
A) $586,445 B) $616,445 C) $630,000 D) $646,555 Scenario 12.1: Jennifer has decided to give up her pack-a-day smoking habit and invest the money she would have spent on cigarettes in a retirement account. At $6.00 a pack, Jennifer is currently spending $2,190 per year on cigarettes. Jennifer is 25 years old and plans to retire in 35 years, at age 60. She has chosen a retirement account that will earn a long-term average return of 5 percent per year. Jennifer is currently earning $40,000 annually. Assume that the average annual inflation rate will be 5 percent per year, that the cost of cigarettes will increase with inflation, and that Jennifer's income will also rise with the inflation rate.
Is there evidence that an increase in per capita income stimulates population growth?
What will be an ideal response?
Adverse selection in competitive insurance markets harms
a. high-risk individuals. b. low risk individuals. c. owners of competitive insurance companies. d. everyone.
Explain how an increase in the price level changes interest rates. How does this change in interest rates lead to changes in investment and net exports?