question archive The government raises taxed by €100 billion
Subject:EconomicsPrice:2.88 Bought3
The government raises taxed by €100 billion. If the marginal propensity to consume is 0.6, what happens to public savings? What will happen to private savings? What will happen to national savings? Do they rise or fall? By what amount?
A. Public saving increases by €100 billion, private saving falls €40 billion and national saving increases by €60 billion.
B. Public saving increases by €60 billion, private saving falls €40 billion and national saving increases by €100 billion.
C. Public saving increases by €60 billion, private saving falls €60 billion and national saving increase by €120 billion.
D. Public saving increases by €100 billion, private saving falls €60 billion and national saving increases by €40 billion.
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