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Suppose the Marginal Propensity to Consume Is Equal to 0

question 143

Multiple Choice

Suppose the marginal propensity to consume is equal to 0.75.If the government lowers tax rates and tax revenue falls by $100 million,then disposable income will increase by________ million and consumption spending will initially increase by ________ million.


Definitions:

Heart Disease

Various heart-related disorders including diseases of the blood vessels, abnormalities in heart rhythm (arrhythmias), and congenital heart defects, among others.

Problem-focused Coping

A strategy to deal with stress by tackling the problem causing the stress directly.

Self-control

The power to oversee one's feelings, mentations, and behaviors whilst faced with allurements and instinctive drives.

Impulsive Spending

The act of making purchases without thorough consideration of the consequences, often driven by an immediate desire for gratification.

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