Equations for C, I, G, and NX are given below. If the equilibrium level of GDP is 21,500, what is the marginal propensity to consume?
C = 1,500 + (MPC)Y
I = 1,000
G = 2,000
NX = -200
A) 0.67 B) 0.75 C) 0.8 D) 0.9
Question 2
Refer to Figure 29-3. Consider the market for U.S. dollars against the Japanese yen shown above. An event which could have caused the changes shown in the graph would be
A) an economic expansion in the United States.
B) an increase in U.S. real income.
C) a decrease in Japanese interest rates.
D) speculators expect the dollar to depreciate in value in the near future.
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