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

---

Definitions:

Fundamental Attribution Error

A cognitive bias where people are more likely to attribute another's actions to their character or personality, while overlooking potential situational influences.

Explanations

The process of making something clear or understandable, often involving the provision of reasons, causes, or justifications.

Effectiveness

The degree to which something is successful in producing a desired result or outcome; in a second definition, the capability of producing the intended result or achievement of objectives.

Persuade

To convince someone to do or believe something through reasoning or argument.