If an Initial Increase in Government Spending of $100 Billion

question 101

Multiple Choice

If an initial increase in government spending of $100 billion leads to a total increase of $400 billion in income,the marginal propensity to consume in the economy is

• A) 0.4.
• B) -0.8.
• C) 0.5.
• D) 0.75.
• E) 0.8.

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Definitions:

Accuracy

The degree to which the result of a measurement, calculation, or specification conforms to the correct value or a standard.

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The process of identifying and detailing exact requirements or features.

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The process of setting objectives, determining strategies to achieve those objectives, and developing plans to integrate and coordinate activities.