In Figure 1 below if the economy were at Y2 then we would expect there to be:
A. a reduction in inventories.
B. an increase in inventories.
C. no change in inventories.
D. an increase in consumption spending.
C. no change in inventories.
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All of the following statements about consuming in excess of one's disposable income are true, except:
A. It is possible, and it's called dissaving B. In this case, the values of both saving and the APS are negative C. (APC + APS) will be less than 1 in this situation D. The value of APC will be greater than 1 in this case
Suppose a family wants to save $60,000 for a child's tuition. The child will be attending college in 18 years. For simplicity, assume the family is saving for a one-time college tuition payment. If the interest rate is 6%, then about how much does this family need to deposit in the bank today?
A. $10,000 B. $42,000 C. $21,000 D. $57,000