If the MPS rises, then the MPC will:a. Fallb. Risec. Stay the sameIn what direction will each of the following occurrences shift the consumption and saving schedules, other things equal?a. A large decrease in real estate values, including private homes.b. A sharp, sustained increase in stock prices.c. A 5-year increase in the minimum age for collecting Social Security benefits.d. An economywide expectation that a recession is over and that a robust expansion will occur.e. A substantial increase in household borrowing to finance auto purchases.Irving owns a chain of movie theaters. He is considering whether he should build a new theather downtown. The expected rate of return is 15 percent per year. He can borrow money at a 12 percent interest rate to finance the project. Should Irving proceed with this project?Which of the following scenarios will shift the investment demand curve right? (Select one or more answers)a. Business taxes increaseb. The expected return on capital increases.c. Firms have a lot of unused production capcity.d. Firms are planning on increasing their inventories.

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MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.A: The Simple Algebra Of Income Determination And The Multiplier

Problem 4TY

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If the MPS rises, then the MPC will:

a. Fall

b. Rise

c. Stay the same

In what direction will each of the following occurrences shift the consumption and saving schedules, other things equal?

a. A large decrease in real estate values, including private homes.

b. A sharp, sustained increase in stock prices.

c. A 5-year increase in the minimum age for collecting Social Security benefits.

d. An economywide expectation that a recession is over and that a robust expansion will occur.

e. A substantial increase in household borrowing to finance auto purchases.

Irving owns a chain of movie theaters. He is considering whether he should build a new theather downtown. The expected rate of return is 15 percent per year. He can borrow money at a 12 percent interest rate to finance the project. Should Irving proceed with this project?
Which of the following scenarios will shift the investment demand curve right? (Select one or more answers)

a. Business taxes increase

b. The expected return on capital increases.

c. Firms have a lot of unused production capcity.

d. Firms are planning on increasing their inventories.

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