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Author Question: Suppose the marginal propensity to consume is 0.63, the marginal propensity to import equals 0.08, ... (Read 142 times)

Engineer

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on: Jun 30, 2018
Suppose the marginal propensity to consume is 0.63, the marginal propensity to import equals 0.08, and personal income taxes amount to 9 percent of GDP. The spending multiplier for this economy is equal to _____.
 a. 0.54
  b. 0.80
  c. 1.25
  d. 1.41
  e. 1.85

Question 2

Which of the following explains why the quantity of a good demanded decreases when its price increases?
 a. Consumer preferences change when the price of a good changes.
 b. The nominal income of consumers falls when the price of a good increases.
  c. Substitutes become relatively cheaper when the price of a good increases.
  d. Complements become relatively cheaper when the price of a good increases.


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paavo

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Reply #1 on: Jun 30, 2018
Answer to Question 1

e

Answer to Question 2

c


Engineer

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Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

billybob123

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Reply 3 on: Yesterday
Excellent

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