If the Amount of Spending in an Economy Declines by $1,000

question 238

Multiple Choice

If the amount of spending in an economy declines by $1,000 and the marginal propensity to consume is 0.8, the effect on the economy is a change of _____ in income or output.

• A) $800
• B) $1,000
• C) $1,000.0
• D) $5,000

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Definitions:

Frequency Distribution

A method of understanding test scores by ordering a set of scores from high to low and listing the corresponding frequency of each score across from it.

Histogram

A method of converting a frequency distribution of scores into a bar graph. After combining scores by class interval, the class intervals are placed along the x-axis and the frequency of scores along the y-axis.

Interval

A range of values between two points, often used in statistics and measurements.

Frequency Distribution

An overview of all distinct values in some variable and the number of times they occur.