In a Simple Model with No Government or Foreign Sector

question 49

Multiple Choice

In a simple model with no government or foreign sector, a decline in investment of $10 billion will lead to a $50 billion decline in the equilibrium level of income if

• A)the mps is 0.2
• B)the mpc is 0.5
• C)the ratio of total consumption to total income is 0.8
• D)changes in consumption divided by changes in income equal 0.2
• E)changes in saving divided by changes in income equal 0.8

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Relating to or providing a deep sense of satisfaction or enjoyment.

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