What is the marginal propensity to consume for the economy described in Scenario 10.1?
a. 0.45
b. 0.85
c. 0.65
d. 0.35
e. Cannot be determined
c
You might also like to view...
A decrease in the price of ice cream is likely to cause:
A. an increase in the demand for ice cream cones due to a change in the price of a complementary good. B. an increase in the demand for ice cream cones due to a change in the price of a substitute good. C. an increase in the demand for ice cream cones due to a change in the preferences of consumers. D. a decrease in the demand for ice cream cones due to a change in the price of a related good.
A balanced federal budget
a. cannot have an expansionary effect on the economy. b. can have an expansionary effect on the economy if the government finances spending with taxes on idle funds. c. can have an expansionary effect on the economy if the government finances spending with taxes on funds that would have been used for private consumption. d. can have an expansionary effect on the economy if the government finances spending with taxes on funds that would have been used for private investment.
An open market purchase of T-bonds by the Fed causes the money supply to
a. fall and bond prices to fall. b. rise and bond prices to fall. c. rise and bond prices to rise. d. fall and bond prices to rise.
If a country faces action under Section 301 of the U.S. Trade Act of 1974, it means that the country has
A) exceeded average export growth by more than 50 percent. B) tariffs that are above the legal limit. C) been charged by the United States with systematically engaging in unfair trade practices. D) been charged by the WTO with violating its trade obligations.