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

---

Definitions:

Registration Process

The procedure of formally recording or enrolling something, typically for regulatory, legal, or official purposes.

IPO

An Initial Public Offering (IPO) is the process through which a private company becomes publicly traded by offering its shares for sale to the public for the first time.

Prospectus

An official document that companies must publish when offering securities for sale to the public, detailing financial and other significant information.

IPO Pop

The increase in a stock's price on the first day of trading following its initial public offering (IPO), often reflecting high investor demand.