In the Simple Aggregate Expenditure Model Where All Components of Aggregate

question 103

Multiple Choice

In the simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption, suppose when autonomous aggregate expenditures rise by $1,000 billion, equilibrium real GDP increases by $2,500 billion.Which of the following statements is true?

• A)The multiplier is 2.5.
• B)The MPC = 0.5 where MPC = marginal propensity to consume.
• C)The MPC = 0.75.
• D)The MPC = 0.8.

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Definitions:

Checking-in Behavior

A pattern of behavior where individuals repetitively verify their emotions, thoughts, or surroundings, often seen in anxiety and OCD.

Moral Development

The growth of an individual's understanding of the differences between right and wrong and of how to make decisions based on ethical considerations.

Transgressions

Acts that go against a law, rule, or code of conduct; an offense.

Autobiographical Memory

A type of memory system consisting of episodes recollected from an individual's life, based on a combination of episodic (personal experiences and specific objects, people, and events experienced at particular time and place) and semantic (general knowledge and facts about the world) memory.