In the above table, the marginal propensity to save when disposable income changes from $1,000 to $2,000 is
A) 0.1.
B) 0.2.
C) 0.8.
D) -0.2.
Answer: B) 0.2.
You might also like to view...
Why is it unlikely that tax increases will be the way to eliminate current U.S. federal budget deficits?
A) The revenues generated by increasing taxes on the rich would only pay for a small portion of the federal budget deficit in any recent year. B) Increasing every worker's taxes by the same amount could eliminate the deficit, but it is likely this action would be viewed as too burdensome for workers with modest incomes. C) Since World War II, on average when taxes were increased by a dollar, federal government spending increased by that much and more. D) All of the above.
Every luxury good is a normal good but not every normal good is a luxury.
Answer the following statement true (T) or false (F)
Higher saving is associated with
a. a larger capital stock and a higher standard of living. b. a larger capital stock but not a higher standard of living. c. a higher standard of living but not a larger capital stock. d. neither a higher standard of living nor a higher capital stock.
Which of the following is not an example of M1 money?
(A) A checking account (B) Travelers' checks (C) Currency (D) A mutual fund