What Is the Spending Multiplier If the Marginal Propensity to Consume

question 65

Multiple Choice

What is the spending multiplier if the marginal propensity to consume is 0.60?

• A) 1.67
• B) 2.5
• C) 4.0
• D) 6.67

---

Definitions:

Feedback Control

A process or system that uses feedback to regulate, control, or adjust its actions to achieve desired outcomes.

Preliminary Controls

Early measures or procedures put in place to identify potential risks and prevent future problems, ensuring that organizational objectives are achieved effectively.

Post-action Controls

Mechanisms put in place to evaluate and adjust processes or activities after they have occurred, to ensure objectives are met and to learn from the outcomes.

Feedback Control

A process by which information about the past or present influences the same phenomenon in the present or future, commonly used in management and engineering to regulate systems.