Author Question: If a fall in investment demand of 100 units causes equilibrium income to fall by 150 units in the ... (Read 74 times)

nmorano1 · **on:** Jun 30, 2018

If a fall in investment demand of 100 units causes equilibrium income to fall by 150 units in the simple Keynesian model, then the marginal propensity to save must be

a. .25.
b. 1.5.
c. .5.
d. 1/3.
e. 2/3.

Question 2

If people increase their expected rate of interest, the speculative demand for money curve will _____ and money supply will _____.

a. shift downward, remain unchanged.
b. shift upward; remain unchanged.
c. not be affected; shifts upward.
d. not be affected; not be affected.