The saving schedule shows the relationship of saving of households to the level of
A. disposable income.
B. consumption.
C. the average propensity to save.
D. investment.
Answer: A
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Suppose you find $1000 in your attic and decide to deposit it all into your local bank, which must hold 20% as required reserves. The deposit expansion multiplier suggests that this $1,000 "injection" of new money will most likely
A) increase the money supply by a little more than $1,000. B) increase the money supply by a little less than $1,000. C) increase the money supply by only $1,000. D) increase the money supply by $5,000.
The economy is in equilibrium, TP = TE, and Real GDP is $2,000 billion. The MPC is 0.75, the multiplier is operative, and idle resources exist at each expenditure round. Autonomous investment spending falls by $10 billion. As a result, the TE curve shifts __________, inventory levels unexpectedly __________, business firms __________ the quantity of goods and services they produce, and Real GDP
__________ by __________. A) downward; rise; decrease; falls; $7.5 billion B) downward; fall; increase; rises; $40 billion C) downward; rise; decrease; falls; $40 billion D) upward; rise; decrease; falls; $40 billion E) downward; fall; decrease; falls; $7.5 billion
Assume an economy is producing only one product. Year 2 is the base year. Output and price data for a five-year period are given.YearUnits of OutputPrice Per Unit14$425537849951010Refer to the above data. If year 2 is chosen as the base year, then in determining real GDP, nominal GDP for:
A. years 1 and 2 must be deflated. B. year 1 must be inflated. C. years 3, 4, and 5 must be inflated. D. year 2 must be deflated.
Which of the following goods is least likely to be in a market basket?
A. A missile B. A gallon of milk C. A tank of heating oil D. A pair of khaki pants