Answer to Question 1
Changes in the income of any nation impact the level of exports and imports of all other nations trading with it. For example, in the United States aggregate demand increases if the income of our trading partners, such as Mexico and Canada, increases because some of the increase in Mexican and Canadian income translates into buying goods and services imported from the United States. As a result, U.S. aggregate demand increases, which means that U.S. real GDP increases. Thus increases in foreign income increase domestic real GDP while decreases in foreign income decrease domestic real GDP.
Answer to Question 2
The marginal propensity to consume is the change in consumption expenditure divided by the change in disposable income that brought it about. In this case, the marginal propensity to consume equals (0.5 trillion 1.0 trillion) = 0.50.
Comet Tempel 1 67 seconds after colliding with the Deep Impact probe.
Worldwide Variations in Population and Income Levels Developed countries represent only 18% of the
Sources of income for U.S. population aged 65 and over.
The Global Impact of Climate Change
The Parade of World Income
Under ideal conditions, a single cell of the bacterium E. coli would divide every 20 minutes to ...