Author Question: If the marginal propensity to consume = 0.75, then: a. the marginal propensity to save = 0.75. b. ... (Read 77 times)

FButt · **on:** Jun 30, 2018

If the marginal propensity to consume = 0.75, then:
a. the marginal propensity to save = 0.75.
b. the marginal propensity to save = 1.33.
c. the marginal propensity to save = 0.20.
d. the marginal propensity to save = 0.25.
e. since the marginal propensity to save and the marginal propensity to consume are unrelated, we cannot determine the marginal propensity to save from the information given.

Question 2

As the size of a nation's outstanding debt gets larger and larger relative to the size of the economy:
a. eventually it will become difficult for the country to borrow in global credit markets.
b. the country will have to pay higher real interest rates in order to induce investors to purchase its bonds.
c. at some point, the country will be more or less forced to bring spending into line with revenues in order to maintain the confidence of investors.
d. all of these are correct.