a. If an economy's MPC = 0.80 and income rises by $20 billion in an economy, then consumption spending should increase by:?

a	?$6 billion.
b	$16 billion.?
c	$28 billion.?
d	$20 billion.?
e	$14 billion.

b. The market interest rate is important for firms to consider when making investment decisions:?

a	always, whether funds must be borrowed or firms have the funds on hand.?
b	only when firms have the money to invest in capital.?
c	?only when funds are borrowed from financial intermediaries.
d	only when firms have funds on hand and are ready to lend them.?
e	only when firms purchase new equipment rather than a new building.

c. An increase in the market interest rate will _____.?

a	increase investment in capital because income will increase?
b	increase investment in capital, because the rate of return on capital will be higher?
c	reduce investment in capital, because the rate of return on capital will be lower?
d	?have no effect on investment
e	reduce investment in capital, because the cost of borrowing increased

d. Each of the following will cause an increase in "I" Investment, except which one?

a	?greater rates-of-return on capital
b	decrease in savings
c	improvement in business expectations? about profits
d	decrease in interest rate?s

e. If disposable incomes in the United States increase, then U.S. _____.?

a	exports increase
b	imports decrease and exports decrease?
c	?imports increase
d	net exports remains constant?
e	imports remain constant and exports increase

f. If disposable incomes in other countries increase, then U.S. _____.?

a	?net exports are not affected
b	exports increase and imports increase?
c	exports increase?
d	imports increase
e	imports decrease and exports decrease