The Federal Reserve System is the central bank of the United States.

Suppose policy makers want to increase GDP by $450 billion. If the marginal propensity to consume is 0.9, by how much must taxes decrease to achieve this target?

What will be an ideal response?

Social Security _____

a. reduces the incentive to save b. increases the incentive to save c. has no effect on saving d. increases the incentive to save when population growth is falling and decreases the incentive to save when population growth is falling