Using real GDP on the horizontal axis instead of real disposable income implies that a marginal propensity to consume 0.75 generates for every additional $100 of real GDP
A) $25 of additional saving.
B) $56.25 of additional consumption spending.
C) $25 of additional saving and taxes.
D) $75 of additional real disposable income.
C
Economics
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Investment spending ________
A) is comprised of fixed and inventory investment B) is negatively related to the real interest rate C) is heavily influenced by what Keynes coined as "animal spirits" D) all of the above E) none of the above
Economics
The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
Economics