Suppose the savings rate (s) in the economy is 30%, GDP is $1,000, and investment can be expressed as I=s*Y. Calculate the level of investment in this economy. Question 9 options: 1) $600. 2) $330. 3) $300. 4) $150.
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- ) A college is considering investing $6 million to add 10,000 seats to its football stadium. The athletic department forecasts it can sell all these extra seats at each game for a ticket price of $20 per seat, and the team plays six home games per year. If the school can borrow at an interest rate of 14%, should the school undertake this project? (Show your math!) What would happen if the school expected a losing season and could sell tickets for only 5,000 of the seats?Assume an intertemporal budget constraint that shows how consumption can be traded off between two periods, t and t+1. Assume the consumer can save and borrow at the same interest rate of 10%. Assume the consumer collects income of $100 in each period. To gain an extra $10 dollars in period t+1, what must the consumer give up in period t?If Samantha's income is reduced to zero after she loses her job, her consumption will be ________ and her saving will be ________. Group of answer choices greater than zero; less than zero less than zero; less than zero greater than zero; greater than zero less than zero; greater than zero
- As shown in Exhibit 2, savings occurs: Group of answer choices at 0. between 0 and $4 trillion. at $2 trillion. where disposable income is greater than $4 trillion.which of the following occurs when disposable income is zero? Select one: a. consumption is negative b. consumption must be zero c. none of the given options d. saving must be zeroWhich of the following two effects of a decrease in the tax rate on saving would raise savings? a. the income effect and the substitution effect b. the income effect but not the substitution effect c. the substitution effect but not the income effect d. neither the substitution effect nor the income effect
- Marginal propensity to save is: A total saving divided by total income. B the change in total saving divided by the change in total income. C total saving when total income is zero. D total saving that is based on expected future income.. choose the correct answer: If Jack received a $1,000 bonus and his marginal propensity to save is 0.15, his consumption rises by______ and his saving rises by_______. $150; $500 (B) $850; $150 (C) $150; $850 (D) $1,000; $150 2) The marginal propensity to save is 0.15, the marginal propensity to consume: is 1.15. (B) is 0.85. (C) is 0.15. (D) cannot be determined by the given information.If a household’s income falls from R12 000 to R10 000, and its consumption falls from R9 500 to R8 000, then:(1) The marginal propensity to consume is ‐0.8. (2) The marginal propensity to consume is 0.75. (3) The marginal propensity to consume is 0.2. (4) The marginal propensity to save is 0.15.
- Consider two savings accounts that pay the same interest rate. One account lets you take your money out on demand. The second requires that you give 30-day advance notification before withdrawals. Which account would you prefer? Why? Can you imagine a person who might make the opposite choice? What do these choices say about the theory of the consumption function?Which of the following statements is correct? The saving function and the consumption function have the same slope. The consumption function is the same in the short and in the long run. Disposable income does not affect the level of savings. The steeper the consumption function, the flatter the saving function.an economy is in equilibrium when which of the following conditions is satisfied: (a) total savings equals zero (b) output equals zero (c) consumption equals saving (d) total savings equals investment (e) all of the above
