Assume General Motors has decided to build an assembly plant in St. Louis. The plant will employ 1,000 full-time workers at an annual wage of $40,000 each. If the marginal propensity to consume in St. Louis is 2/3, what change in income will result from operation of the plant for one year?
a. $26.7 million.
b. $40 million.
c. $80 million.
d. $120 million.
d
You might also like to view...
President Reagan often stated he preferred supply side policies. Which of the following federal government policies would be considered supply side?
i. decrease the quantity of money ii. lower taxes iii. lower the interest rate A) i only B) ii only C) iii only D) i and iii E) i, ii, and iii
Which of the following statements is NOT true of a corporation?
A) It is an entity separate from the individuals who own it. B) It can enter into contracts. C) It can incur debt that is an obligation of the corporation but not of its individual owners. D) It has the right to sue and be sued. E) It is legally obliged to distribute all profits to shareholders.
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow.
Figure 6.2Refer to Figure 6.2. Mr. Lingle?s budget constraint is AC. Point D is
A. in Mr. Lingle's opportunity set but is not on his budget constraint. B. an available option and Mr. Lingle does not spend all of his income. C. an available option and Mr. Lingle exactly spends all of his income. D. not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
The level of household savings constrains firm investment.
Answer the following statement true (T) or false (F)