If the Marginal Propensity to Save Is 0

question 125

Multiple Choice

If the marginal propensity to save is 0.10 and the initial decline in investment is $100,by how much will aggregate demand eventually decrease?

• A)$100.
• B)$900.
• C)$1,000.
• D)$10,000.

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Definitions:

Cause of Action

A set of facts sufficient to justify a right to sue to obtain money, property, or the enforcement of a right against another party.

Proximate Cause

A legal term referring to an event sufficiently related to an injury that the courts deem the event to be the cause of that injury.

Negligence

The lack of appropriate care that a sensible person would have provided in comparable circumstances, leading to injury or detriment.

Causal Chain

A sequence of events where one event causes the next, leading to the final outcome.