If the Marginal Propensity to Consume Is 0

question 460

Multiple Choice

If the marginal propensity to consume is 0.8 and there no income taxes or imports, the multiplier for a change in autonomous expenditure equals

• A) 5.0.
• B) 0.8.
• C) 1.0
• D) 4.0.

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Definitions:

Morality

Principles or standards determining what behaviors are considered right or wrong by a society or individual.

Hormones

Chemical messengers produced by glands in the body that regulate physiological activities and maintain homeostasis.

Neurotransmitters

Substances that carry signals between neurons across synapses within the nervous system.

Synapses

The junctions through which neurons communicate with each other, using chemical or electrical signals.