If disposable income is $900 billion when the average propensity to consume is 0.9, it can be concluded that:
A. The marginal propensity to consume is also 0.9
B. The marginal propensity to save is 0.1
C. Consumption is $900 billion
D. Saving is $90 billion
D. Saving is $90 billion
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If a good has an income elasticity of demand greater than 1, one might classify that good as
A) a necessity. B) a luxury. C) unusual. D) inelastic.
You probably know why firms advertise. But the incentives to advertise vary from market structure to market structure. In which market structure is there a weak, but still existent, reason to advertise?
a. monopoly b. oligopoly c. monopolistic competition d. perfect competition e. there is no weak incentive—they are always strong
Which of the following is most important if the living standards of people residing in a country are going to improve?
What will be an ideal response?
Contractionary monetary policy to prevent real GDP from rising above potential real GDP would cause the inflation rate to be ________ and real GDP to be ________
A) higher; higher B) higher; lower C) lower; higher D) lower; lower