If Households Save $30 Billion More at Each Level of Income

question 91

Multiple Choice

If households save $30 billion more at each level of income and the marginal propensity to consume (MPC) is 0.9,the aggregate expenditure line will _____.

• A)intersect the 45-degree line at a real GDP of $30 billion
• B)shift upward by $30 billion
• C)shift downward by $30 billion
• D)shift upward by $300 billion because of the multiplier effect
• E)shift downward by $300 billion because of the multiplier effect

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Definitions:

Postmodernity

A term that characterizes postindustrial societies, including a focus on the production and management of information and skepticism of science and technology.

Modernity

The quality or condition of being modern, often associated with cultural and economic developments in society following the Age of Enlightenment.

Social Change

The alteration over time in behavior patterns, cultural values, and norms of a society.

Cultural Diffusion

The process by which cultural beliefs, practices, and items spread from one society or culture to another.