If an Increase in Autonomous Consumption Spending of $25 Million

question 135

Multiple Choice

If an increase in autonomous consumption spending of $25 million results in a $100 million increase in equilibrium real GDP,then

• A)the MPC is 0.25.
• B)the MPC is 0.75.
• C)the MPC is 0.8.
• D)the MPC is 2.5.

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Definitions:

Irrigation Systems

Networks of tubes, pumps, and canals used to transport water to agricultural crops to enhance growth when rainfall is not sufficient.

Power Generators

Machines or devices that transform various forms of energy into electrical power.

Capital Formation

The process of building up the physical and financial assets of a country or region for the purpose of increasing its capacity for production.

Economic Growth

An increase in the amount of goods and services produced per head of the population over a period of time.