If the Marginal Propensity to Consume Is 0

question 246

Multiple Choice

If the marginal propensity to consume is 0.8, full-employment output is $14 trillion, and current output is $13.5 trillion, then investment spending must _____ to reach full-employment output.

• A) increase by $0.5 trillion
• B) decrease by $0.5 trillion
• C) increase by $0.1 trillion
• D) increase by $0.4 trillion

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Definitions:

Social Anxiety Disorder

A mental health condition characterized by intense fear and avoidance of social situations due to feelings of embarrassment, self-consciousness, and concern about being judged by others.

Agoraphobia

An anxiety disorder characterized by an intense fear of places or situations where escape might be difficult.

Panic Disorder

A psychiatric condition marked by repeated episodes of intense fear or anxiety that appear suddenly and often unexpectedly.

Obsessive-compulsive Disorder

A mental disorder characterized by uncontrollable, reoccurring thoughts (obsessions) and behaviors (compulsions) an individual feels compelled to repeat.