Other things being constant, if the marginal propensity to save (MPS) is 0.2, and private investment spending falls by $100 million, then real Gross Domestic Product (GDP)
A. increases by $80 million.
B. decreases by $50 million.
C. decreases by $500 million.
D. increases by $1 billion.
Answer: C
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Refer to Table 9-2. Assume the market basket for the consumer price index has two products — bread and milk — with the following values in 2011 and 2016 for price and quantity: The Consumer Price Index for 2016 equals
A) 118. B) 116. C) 86. D) 85.
In a typical month of expansion, the U.S. economy sheds about 3.8 million jobs but creates only 2.8 million new ones
Indicate whether the statement is true or false
Which of the following groups believe that lower tax rates will increase the incentives to work, invest, and produce?
A. Monetarists. B. Supply-siders. C. New classical economists. D. Keynesians.
Income elasticity will be positive for:
A. all normal goods. B. only necessities. C. only luxury goods with substitutes. D. all inferior goods.