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:

George Herbert Mead

An American philosopher, sociologist, and psychologist, known for his work on the development of the self and the concept of social behaviorism.

Dramaturgy

A sociological perspective that views social interactions as theatrical performances, where individuals present themselves in a manner that is most favorable to their audience.

Social Interaction

The dynamic exchange between individuals or groups, involving communication, behavior, and action, which influences social relationships and societal structures.

Nonverbal Messages

Communication that occurs without words, through gestures, expressions, tone of voice, posture, and other body language.