In a closed economy with fixed prices and wages and where the marginal propensity to consume of the rich is smaller than that of the poor, a transfer of income from the rich to the poor will 3 a. Increase equilibrium level of output but reduce private savings b. Decrease equilibrium level of output but increase private savings c. Increase in output and an increase private savings d. Decrease in output and a decrease in private savings

In a closed economy with fixed prices and wages and where the marginal propensity to consume of the rich is smaller than that of the poor, a transfer of income from the rich to the poor will 3 a. Increase equilibrium level of output but reduce private savings b. Decrease equilibrium level of output but increase private savings c. Increase in output and an increase private savings d. Decrease in output and a decrease in private savings

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Savings,investment And The Financial System

Section: Chapter Questions

Problem 4PA

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