In a Private Closed Economy (A) the Marginal Propensity to Save

question 163

Multiple Choice

In a private closed economy (a) the marginal propensity to save is 0.25, (b) consumption equals income when consumption is $120 billion, and (c) the level of investment is $40 billion.What is the equilibrium level of income?

• A)$280 billion
• B)$320 billion
• C)$262 billion
• D)$198 billion

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Definitions:

Nonfinancial Factors

Aspects influencing decision-making in business that are not quantifiable in monetary terms, such as employee satisfaction or environmental impact.

Employee Morale

The overall outlook, attitude, satisfaction, and confidence that employees feel at work, which can significantly impact an organization's success.

Timeliness of Delivery

The measure of how quickly and within the scheduled timeframe goods or services are delivered to the customer.

Incremental Costs

The additional costs that are incurred if the level of business activity or output changes.