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When income increases, not all of the additional income is spent. The increase i

ID: 1211362 • Letter: W

Question

When income increases, not all of the additional income is spent. The increase in saving that occurs expressed as % increase in income is known as ...

the saving rate

savings

the marginal propensity to consume

the marginal propensity to save

The multiplier will get greater as U.S. households....[choose two responses]

spend a smaller portion of any change in income overseas

devote a larger portion of any change in income to saving

have less of any additional income taxed away

the amount of idle resources in the nation becomes smaller, giving he economy less "room to grow".

Question 4

Expansionary fiscal policy....[select three]

is more suitable in a situation where actual GDP is greater than potential GDP.

is more suitable in a situation where actual GDP is less than potential GDP.

combats inflation

combats unemployment

includes cutting $G and/or raising t

includes cutting t and/or raising $G

the saving rate

savings

the marginal propensity to consume

the marginal propensity to save

Explanation / Answer

Marginal Propensity to save is the percentage of amount saved for every 1 dollar increase in income.

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