Author Question: If the marginal propensity to consume is equal to 0.70 and income rises by 20 billion in an economy, ... (Read 93 times)

elizabeth18

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If the marginal propensity to consume is equal to 0.70 and income rises by 20 billion in an economy, then consumption spending will increase by:
 a. 6 billion.
 b. 14 billion.
  c. 20 billion.
  d. 28 billion.
  e. 67 billion.

Question 2

When negative externalities like pollution exist, competition leads to:
 a. a socially efficient outcome.
  b. too few goods being bought and sold.
  c. a market equilibrium price that is too high.
  d. more production than would be efficient.



voltaire123

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Answer to Question 1

b

Answer to Question 2

d



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