If the Marginal Propensity to Save Is 0

question 116

Multiple Choice

If the marginal propensity to save is 0.2 in a private closed economy, a $20 billion rise in investment spending will increase:

• A)GDP by $120 billion.
• B)GDP by $20 billion.
• C)saving by $25 billion.
• D)consumption by $80 billion.

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Definitions:

Title Search

A legal check on the history of ownership of a property to ensure there are no liens, encumbrances, or legal issues before its purchase.

Underground Tanks

Storage containers buried below the ground, typically used for holding liquids like fuel or chemicals.

Utmost Good Faith

A principle in contract law and insurance requiring all parties to act honestly and not mislead or withhold critical information from one another.

Real Estate Agent

A licensed professional who represents buyers or sellers in real estate transactions, facilitating the sale or lease of properties.