Answer:
D. Consumption by $80 billion.
Explanation:
Marginal propensity to Save = 1 / MPS
= 1 / 0.2
= 5
= $20 billion × 5
= $100 billion
= $100 - $20
= $80 billion
Therefore, a $20 billion rise in investment spending will increase consumption by $80 billion.
The answer is C. Increased demand
Answer:
The correct answer is letter "C": a fall in the price of tennis balls.
Explanation:
The demand law explains the relationship between the price of a product and its quantity demanded. As the price increases, the quantity demanded decreases moving the demand curve to the left. As price decreases, the quantity demanded decreases, moving the demand curve to the right.
Therefore, <em>if the demand curve for tennis balls moves to the right, the price has fallen increasing the quantity demanded.</em>
Answer:
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Explanation:
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