Suppose Economists Observe That an Increase in Government Purchases of $10

question 57

Multiple Choice

Suppose economists observe that an increase in government purchases of $10 billion raises aggregate expenditures by $30 billion. These economists would estimate that the marginal propensity to save is:

• A) 0.67.
• B) 0.33.
• C) 0.5.
• D) 20.

---

Definitions:

Sugar Coating

The practice of presenting information in a more favorable light to make it more palatable or acceptable.

Point-Of-Purchase

The location or environment within a retail space where the actual purchase decision is made, often enhanced by displays or advertisements.

Merchandising

The activity of promoting the sale of goods, especially by their presentation in retail outlets, including product display, signage, and special offers.

Packaging

The process and design of wrapping or enclosing products for distribution, storage, sale, and use.