If the multiplier in the economy is 3, the marginal propensity to save (MPS) must be
A. 3.
B. 0.67.
C. 0.33.
D. 1.
Answer: C
You might also like to view...
Assume that Virgil purchases a combination of products Y and Z such that, after he is done spending his entire budget, MUy / Py = 25 and MUz / Pz = 25. Based on the equal marginal principle, Virgil
A. should have purchased more Y and more Z. B. should have purchased less Y and more Z. C. is maximizing his total utility. D. should have purchased more Y and less Z.
Due to a recession, Hostess Bakeries found that the demand for its products decreased. The demand for products ________ the demand for bakers and ________ the equilibrium wage rate paid to bakers
A) increased; raised B) decreased; raised C) increased; lowered D) decreased; lowered
Nominal GDP is another term for
A. current dollar GDP. B. constant dollar GDP. C. adjusted dollar GDP. D. relative value GDP.
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y2. C. P3 and Y1. D. P2 and Y3.