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.