In a Simple Economy in Which Prices Are Constant and There

question 276

Multiple Choice

In a simple economy in which prices are constant and there are no income taxes or imports, the marginal propensity to save is 0.2. If exports increase $50, what impact will that have on aggregate expenditure?

• A) increase by $250
• B) increase by $100
• C) decrease by $250
• D) decrease by $100

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Definitions:

Commensalism

A symbiotic relationship between two organisms where one benefits without harming or helping the other.

Co-operation

Working together towards common goals or mutual benefits, often involving sharing resources or coordinating efforts.

Competition

A biological interaction where individuals or species vie for the same resources, such as food or space, in an ecosystem.

Predation

The biological interaction where one organism, the predator, hunts and consumes another organism, the prey, as a means of obtaining energy and nutrients.