Examlex

Solved

A $20 Billion Decrease in Investment in a Private Closed

question 157

True/False

A $20 billion decrease in investment in a private closed economy that has an MPS of 0.5 will reduce saving by $10 billion once the multiplier process has ended.


Definitions:

Shortage

A situation where demand for a product or service exceeds its supply in a market.

Surplus

The amount by which the quantity supplied of a good exceeds the quantity demanded at a specific price.

Price Ceiling

A legal maximum price set below the equilibrium price, preventing sellers from charging more than this amount.

Price Floor

A government-imposed minimum price set above the equilibrium price, preventing market prices from falling below a certain level.

Related Questions