Assume the MPC Is 2/3

question 114

Multiple Choice

Assume the MPC is 2/3.If investment spending increases by $2 billion, the level of GDP will increase by:

• A)$3 billion.
• B)$2/3 billion.
• C)$2 billion.
• D)$6 billion.

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Definitions:

Utility

In economics, the total satisfaction received from consuming a good or service.

Indifference Map

A graphical representation of different combinations of two goods or bundles among which a consumer is indifferent.

Indifference Curve

A graph representing combinations of goods or services among which a consumer is indifferent, showing preference levels and the trade-offs between different bundles.