10:41 1 File Details 23/FA-ECO-201-02 Principles... 2 INDIVIDUALS INDIVIDUAL 2. In year one, Adam earns $1,000 and saves $100. In year 2, Adam gets a $500 raise so that he earns a total of $1,500. Out of that $1,500, he saves $200. What is Adam's MPC out of his $500 raise? LO1 a. 0.50. b. 0.75. c. 0.80. d. 1.00. CHAPTER 30 CLASS EXERCISES - QUESTIONS 4. In what direction will each of the following occurrences shift the consumption and saving schedules, other things equal? LO2 2 INDIVIDUALS a. A large decrease in real estate values, including private homes. b. A sharp, sustained increase in stock prices. c. A 5-year increase in the minimum age for collecting Social Security benefits. d. An economy-wide expectation that a recession is over and that a robust expansion will occur. e. A substantial increase in household borrowing to finance auto purchases. a. Business taxes increase. b. The expected return on capital increases. c. Firms have a lot of unused production capacity. d. Firms are planning on increasing