If households save $30 billion more at each level of income and the marginal propensity to consume (MPC) is 0.9, the aggregate expenditure line will

A perfectly competitive firm discovers that its MRPL divided by the wage equals 1.5. The firm should

A) check the MRP of the other inputs and divide them by their prices. If they are all equal to 1.5 it is maximizing profits. B) hire more labor. C) purchase more capital. D) try to pay a lower wage rate.

Jan's Dry Cleaning holds $10,000 on a typical day, although only $2,000 is essential for carrying out business. Making a midday deposit is estimated to reduce cash holdings to $8,000 and cost an extra $80 per year in lost production. If, in addition, an armored car service is engaged to pick up cash more frequently for a fee of $120 per year, cash holdings will be further reduced to $6,000 per day. Employing a computerized cash management service for an annual fee of $180 would reduce cash holdings further to $4,000. If any reduction in cash holdings will be used to purchase government bonds earning 5 percent, then how much money should Jan's hold?

A. $10,000 B. $6,000 C. $4,000 D. $8,000