If Y = $500 Billion, Autonomous Consumption = $400 Billion

question 5

Multiple Choice

If Y = $500 billion, autonomous consumption = $400 billion, and the marginal propensity to save = 0.20, then saving will equal:

• A) − $300 billion.
• B) $300 billion.
• C) -$80 billion.
• D) $80 billion.

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Definitions:

Open Account

A form of payment in which an importer doesn’t pay for goods until after they have been received, creating an unfavorable balance of value for the exporter.

Less Favorable

Describes conditions or treatment that are comparatively disadvantageous or inferior to others.

Potential Risk

A possibility of harm, loss, or any negative occurrence that may or may not happen in the future.

Least Safe

The condition or status of having the highest potential for danger or risk among compared alternatives.