The figure shows the saving schedules for economies 1, 2, 3, and 4. Which economy has the highest marginal propensity to consume?

Suppose two economies, the United States and Saudi Arabia, each have a GDP of $1,000 . A U.S. war effort involves the purchase of $100 of Saudi oil, which is financed by selling $100 worth of U.S. government bonds to Saudi Arabia. In subsequent years, GDP remains at $1,000 for each country and the United States imposes a $10 tax to make its debt payments to the Saudis. Now while the United States

is still debt obligated, a. U.S. consumption is $1,000 and Saudi consumption is $1,000 b. U.S. consumption is $990 and Saudi consumption is $990 c. U.S. consumption is $1,010 and Saudi consumption is $990 d. U.S. consumption is $1,000 and Saudi consumption is $1,010 e. U.S. consumption is $990 and Saudi consumption is $1,010

Over the long run, a government's fundamental source of revenues is

A) printing money. B) user fees and taxes. C) exports. D) gold sales.