Which of the following is/are true?

I.Private savings equals disposable income minus taxes minus consumption.

II.National savings equals private savings plus public savings.

Select one:

A.Only I is true.

B.Only II is true.

C.Both of the above are true.

D.None of the above is true.

Which of the following is/are true?

I.In accordance with the consumption function, private savings decreases with an increase in real disposable income.

II.In the classical model of the long-run closed economy, an increase in real interest rate shifts the investment schedule to the left in the loanable funds market.

Select one:

A.Only I is true.

B.Only II is true.

C.Both of the above are true.

D.None of the above is true.

In the classical model of the LR closed economy, an increase in autonomous consumption C0will

I.decrease the equilibrium real interest rate.

II.decrease the equilibrium investment spending.

Select one:

A.Only I is true.

B.Only II is true.

C.Both of the above are true.

D.None of the above is true.

In the classical model of the LR closed economy, with MPC=0.4 and interest sensitivity parameter b=1000, a reduction in taxes by 100 (T=-100) will

I.increase private savings by 40.

II.reduce equilibrium investment spending by 40.

Select one:

A.Only I is true.

B.Only II is true.

C.Both of the above are true.

D.None of the above is true.

In the classical model of the LR closed economy, an increase in autonomous consumptionC0together with an increase in autonomous investment I0willdefinitely

I.increase equilibrium investment spending.

II.decrease equilibrium real interest rate.

Select one:

A.Only I is true.

B.Only II is true.

C.Both of the above are true.

D.None of the above is true.