If the Marginal Propensity to Save Equals 0

question 65

True/False

If the marginal propensity to save equals 0.1 and the marginal propensity to import equals 0.3,an autonomous increase in exports of $1,000 would expand domestic income by $2,500 which leads to an increase in imports of $750.

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Definitions:

Required Return

The minimum gain or profit that an investor expects to earn from an investment, considering the level of risk involved.

Capital Gains Yield

The price appreciation component of the total return on an investment, excluding dividends if any.

Dividend Yield

An indicator of the proportion of dividends disbursed annually by a company to the price of its shares.

Preemptive Rights

Rights that allow existing shareholders to purchase additional shares before the company offers them to the public, helping to maintain their ownership percentage.