If the marginal propensity to save is 0.1, then a 10 million ...

[kamilo84]

If the marginal propensity to save is 0.1, then a 10 million decrease in disposable income will
 
  A) increase consumption by 9 million. B) decrease consumption by 1 million.
  C) increase consumption by 1 million. D) decrease consumption by 9 million.

Question 2

With the federal funds rate near zero and the economy still struggling, In response to already low interest rates doing little to stimulate the economy, the Fed began buying 10-year Treasury notes and certain mortgage-backed securities to keep
 
  interest rates low. This policy is known as
  A) quantitative easing. B) securities-bubble deflating.
  C) contractionary monetary policy. D) inflation targeting.

[LP]

Answer to Question 1

D

Answer to Question 2

A

[kamilo84]

TYSM

[lindahyatt42]

Excellent