Suppose Disposable Income for an Entire Economy Rises from $400

question 93

Multiple Choice

Suppose disposable income for an entire economy rises from $400 billion to $440 billion and desired consumption rises from $350 billion to $380 billion.We can conclude that the marginal propensity to consume for this economy is

• A)0.65.
• B)0.75.
• C)0.80.
• D)0.90.
• E)1.33.

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Definitions:

Tredegar Works

A historic iron works in Richmond, Virginia, significant for its role in manufacturing artillery and other materials for the Confederacy during the American Civil War.

Richmond

A city in Virginia known for its significant history, including roles in the Civil War and civil rights movement.

Confederate

Relating to the confederation of 11 southern US states that seceded from the Union leading to the American Civil War.

Union Troops

The armed forces of the Northern states during the American Civil War, fighting against the Confederate states.