Page 78 - Macroeconomics. book docx_Neat

Saving = Y – C = 500 – 450 = 50

APC = 450 / 500 = 0.9

APS = 50 / 500 = 0.1

MPC = 0.8

MPS = 0.2

Multiple Choice Questions

1. Consumption refers to:

A. Government spending

B. Household spending on goods and services

C. Business investment

D. Export spending

Answer: A

2. The main determinant of consumption is:

A. Interest rate

B. Wealth

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