Consider a Consumption Function in a Simple Macro Model with Government

question 119

Multiple Choice

Consider a consumption function in a simple macro model with government and taxes.Given a marginal propensity to consume out of disposable income of 0.9 and a net tax rate of 10% of national income,the marginal propensity to consume out of national income is

• A)0.09.
• B)0.72.
• C)0.81.
• D)0.90.
• E)1.00.

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Definitions:

Shipbuilding Technology

The development and application of methods, tools, and materials for constructing ships, improving efficiency, durability, and navigability.

Monopoly

The exclusive control by one company over an entire industry or sector, eliminating competition.

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A group of five large, interconnected freshwater lakes located on the border between the United States and Canada, significant for their natural resources and as a transportation route.