If national income increases from $410 to $430 billion and the marginal propensity to save is 0.25, then savings will increase from $5 to billion.
Question
Solution 1
The increase in national income is $430 billion - $410 billion = $20 billion.
The marginal propensity to save (MPS) is the increase in savings divided by the increase in income. In this case, the MPS is 0.25.
So, the increase in savings is MPS * increase in income = 0.25 * $20 billion = $5 billion Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solv
Similar Questions
If national income increases from $410 to $430 billion and the marginal propensity to save is 0.25, then savings will increase from $5 to billion.
Marginal Propensity to consume + Marginal Propensity to Save is always equal to Group of answer choicesidentical01varies
If the marginal propensity to save is 0.2 and the government decreases its purchases by $20 billion, then real GDP will
If the marginal propensity to save is 0.35. What is the size of the expenditure multiplier?Provide answer to one decimal point.
If the marginal propensity to consume is 0.7, the government-purchases multiplier is:0.3.0.7.1.4.3.3.