6) Assume that the economy includes only consumers and businesses, and is in equilibrium with income equal to $6 million and consumption spending equal to $5 million. Which statement is correct?

There is no saving in this economy.

The marginal propensity to consume is 0.83.

The economy will go into disequilibrium because consumption is not equal to income.

Investment is $1 million.

9) The paradox of thrift states that if everyone tries to save more, in total, they might save less.

True

False

10) Tax decreases do not inject money into the economy.

True

False

11) On June 16, 2019,Yahoo Financereported that some Chinese companies were considering building factories in the United States to avoid President Trump's proposed tariffs. If Chinese companies do move their manufacturing hubs to the United States

consumption will not change.

net direct foreign investment will decrease.

investment will increase.

consumption will increase.

14) In the full aggregate expenditures model with net exports included

I+G+X=S+T+M.

C +G+M=S+T+X.

I+G+M=S+T+X.

C+G+X=S+T+M.