If the Marginal Propensity to Save Is 0

question 76

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.

Interpret graphical representations of changes in supply and quantity supplied.

Understand the relationship between supply, demand, and price changes.

Identify the impact of external factors such as natural disasters and seasonal changes on market equilibrium.

Differentiate between shifts in demand and supply versus movements along the demand and supply curves.

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Definitions:

IFRS

Stands for International Financial Reporting Standards, which are designed to make company accounts understandable and comparable across international boundaries.

Highly Liquid Investments

Investments that can easily and quickly be converted into cash with little loss of value.

Petty Cash Fund

A modest sum of money held in reserve for small or unplanned expenses.

Cash Replenishment

The process of refilling a petty cash fund to its designated level after it has been depleted through use.