(Advanced Analysis)In a Private Closed Economy, (A)the Marginal Propensity to Save

question 53

Multiple Choice

(Advanced analysis) In a private closed economy, (a) the marginal propensity to save is 0.25, (b) consumption equals income at $120 billion,and (c) the level of investment is $40 billion.What is the equilibrium level of income?

• A) $280 billion.
• B) $320 billion.
• C) $262 billion.
• D) $198 billion.

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