Consider the Simplest Macro Model in Which Aggregate Output Is

question 140

Multiple Choice

Consider the simplest macro model in which aggregate output is demand-determined.If autonomous consumption increases by $2 billion causing equilibrium national income to rise by $6 billion,the marginal propensity to spend must be

• A)1.0.
• B)0.5.
• C)0.2.
• D)0.67.
• E)3.0.

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