Solved

Suppose Economists Observe That an Increase in Government Purchases of $10

Question 116

Multiple Choice

Suppose economists observe that an increase in government purchases of $10 billion raises aggregate expenditures by $40 billion. These economists would estimate that the marginal propensity to save is


A) 0.25.
B) 0.75.
C) 4.
D) 30.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q111: (Graph: Consumption) Based on the information provided

Q112: If the marginal propensity to consume increases,

Q113: If Tanner believes that his income will

Q114: John Maynard Keynes focused on _ to

Q115: (Figure: Aggregate Expenditures) The figure shows the

Q117: Explain why the balanced budget multiplier is

Q118: Aggregate expenditures are equal to consumption plus

Q119: Where does equilibrium occur in the simple

Q120: Increases in government spending _ equilibrium income,

Q121: If the marginal propensity to consume is