In the country of Marzipana, total consumption in Year 1 was $56,000 million and in Year 2 was $60,000 million. It has been observed that each time disposable income changes in this country by $100, consumption changes by $70 . Using this information compute the change in disposable income from Year 1 to Year 2
a. Disposable income increased by $2,800 million in Year 2.
b. Disposable income decreased by $2,000 million in Year 2.
c. Disposable income increased by $2,000 million in Year 2.
d. Disposable income increased by $4,500 million in Year 2.
e. Disposable income decreased by $2,600 million in Year 2.
a
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An agreement to exchange dollar bank deposits for euro bank deposits in one month is a
A) spot transaction. B) future transaction. C) forward transaction. D) deposit transaction.
When federal government expenditures exceed tax receipts, the Treasury must
A) expand the money supply. B) raise taxes. C) reduce spending. D) sell bonds.
The number of persons who could become lawyers or surgeons is potentially quite large, yet these two groups earn fairly high incomes. One of the main reasons why they do is the
a. return on the investment of many years of training. b. evening-out of their low income during schooling. c. rent on their unique and rare talents. d. scarcity value of their abilities.
Which of the following is not correct?
a. By saving a larger portion of its GDP, a country can raise its output per worker. b. Savers supply their money to the financial system with the expectation that they will get it back with a return at a later date. c. Financial intermediaries are the only type of financial institution. d. The financial system helps match people's saving with other people's borrowing.