Figure 13-6 -Refer to Figure 13-6. Let Y = Real GDP, AE

question 83

Multiple Choice

Figure 13-6
-Refer to Figure 13-6. Let Y = real GDP, AE = Aggregate Expenditures, C = Consumption,
I_P = Planned Investment, G = Government Purchases. Further, I_P and G are autonomous. What is the marginal propensity to consume?

• A) 0.25
• B) 0.5
• C) 1.0
• D) 2

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Definitions:

Journal Entries

The records of financial transactions in an accounting system that detail the accounts affected and in what manner, serving as the primary means to document financial activity.

General Ledger

A complete record of all financial transactions over the life of a company, used to compile the financial statements.

Ledger Accounts

Accounts contained within a ledger, representing a summary of all financial transactions related to that account's category.

Normal Balance

The side (debit or credit) of an account that is usually increased, reflecting its nature as an asset, liability, equity, revenue, or expense.