<ol>
<li><p>In an economy with lump-sum taxes and no international trade, if the marginal
propensity to consume is 0.8, which of the following is true?
(a) When consumption increases by $5, investment increases by a maximum of $1.
(b) When consumption increases by $5, savings increase by a maximum of $1.
(c) When investment increases by $1, income increases by a maximum of $5.
(d) When investment increases by $1, consumption increases by a maximum of $5.
(e) When income increases by $1, investment increases by a maximum of $5.</p></li>
<li><p>An increase in which of the following would reduce the United States
balance-of-trade deficit?
(a) United States demand for foreign goods
(b) United States rate of inflation compared to other countries
(c) The value of foreign currency relative to the United States dollar
(d) The federal budget deficit
(e) United States interest rates compared to other countries</p></li>
</ol>
<p>explanations please. thanks</p>