Autonomous spending rises by $10 billion and Real GDP rises by $50 billion. What does the marginal propensity to save equal?

A. 0.10
B. 0.20
C. 0.80
D. 0.90
E. 0.50


Answer: B. 0.20

Economics

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The main disagreement among economists about the Laffer curve is about whether

A. increases in taxes will decrease GDP. B. the effect of tax decreases on GDP will be so big as to raise government revenues when taxes are cut. C. cutting marginal tax rates will increase the incentive to work. D. the government will collect maximum tax revenue at a 50% tax rate.

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At the profit-maximizing level of output, a monopolist will always operate where:

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According to the paradox of voting,

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