Question Details

Over the long run the most important determinant of our standard of living is 38  



1. "Domestic investment did not fall as sharply as did national saving because ......." Complete this clipping. 
a) private saving increased b) the government deficit shrank 
c) businesses borrowed at higher cost d) businesses borrowed from foreigners 
2. Suppose income is $700b, consumption is $500b, taxes are $60b, and government spending is $80b. National saving is 
a) $100b or less b) more than $100b but not more than $130b 
c) more than $130b but not more than $180b d) more than $180b 
3. Suppose national saving is $150b, the government deficit is $30b and gross investment is $170b. Foreign financing is 
a) $20b or less b) more than $20b but not more than $30b 
c) more than $30b but not more than $50b d) more than $50b 
4. Suppose the multiplier is 3, the marginal tax rate is 20%, and the marginal propensity to consume out of disposable income is 0.9. If government spending increases by $10b, then national saving 
a) increases b) decreases by $1b or less 
c) decreases by more than $1b but not more than $2b d) decreases by more than $2b 
5. Over the long run the most important determinant of our standard of living is 38  
a) judicious use of fiscal policy to prevent recessions 
b) increases in productivity due to technological change 
c) avoiding the unemployment caused by technological change 
d) keeping money supply growth approximately equal to the real rate of growth



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