Author Question: If households save 40 billion less at each level of income and the marginal propensity to consume ... (Read 73 times)

audie · **on:** Jun 30, 2018

If households save 40 billion less at each level of income and the marginal propensity to consume (MPC) is 0.8, the aggregate expenditure line will _____.
a. intersect the 45-degree line at a real GDP of 40 billion
b. shift upward by 40 billion
c. shift downward by 40 billion
d. shift upward by 200 billion because of the multiplier mechanism
e. shift downward by 200 billion because of the multiplier mechanism

Question 2

A totally pollution free environment should be a primary social goal.
a. True
b. False
Indicate whether the statement is true or false