If Total Autonomous Spending Is A? = 800, the Marginal

question 6

Multiple Choice

If total autonomous spending is A? = 800, the marginal propensity to save is mps = 0.2, and the marginal tax rate is t = 0.25, what is the level of equilibrium income?

• A)800
• B)1,000
• C)2,000
• D)3,200
• E)4,000

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Definitions:

Standard Materials Cost

The pre-determined cost of materials that is expected to be incurred under normal conditions.

Price Variance

The difference between the actual cost of a good or service and its expected cost, often used in budgeting and financial analysis.

Materials Price Variance

The difference between the actual cost of direct materials and the standard cost, used in variance analysis.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected amount, which can impact the cost of goods sold.