If the APS rises by .02, how much does total saving rise?
C = $6.4 trillion
Disposable income = $8 trillion
Autonomous consumption = $4 trillion
$8 trillion × .02 = $160 billion
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The tax multiplier is negative because increases in taxes lead to decreases in consumer spending
Indicate whether the statement is true or false
Suppose that the economy is in a position of short-run equilibrium at a point where real GDP is below the full-employment level. Assuming no further change in aggregate demand and self-correction, the movement to a new long-run equilibrium includes a decrease in which of the following? a. The unemployment rate
b. The price level (CPI). c. The level of nominal wages and salaries. d. All of the above.
Which statement is true?
A. Price is calculated by dividing output by total revenue. B. The lowest point on the short-run supply curve is at the break-even point. C. When price exceeds marginal cost, a profit-maximizing firm will decrease production. D. The marginal cost curve intersects the average total cost curve at the break-even point.
All of the following are examples of capital except:
A. the robot used to help produce your car. B. the classroom in which you learn. C. the factory that produces the costume jewelry you buy. D. an uncut diamond that you discover in your backyard.