If the Spending Multiplier Is 5,what Is the Marginal Propensity

question 138

Multiple Choice

If the spending multiplier is 5,what is the marginal propensity to consume in the economy?

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

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Definitions:

Control Group

In experimental research, the group of participants who do not receive the treatment being tested and are used as a benchmark to measure the treatment's effect.

Stress

A state of mental or emotional strain resulting from adverse or demanding circumstances.

Experimental Group

In research, the group of subjects that receives the treatment or intervention under study, in contrast to the control group which does not.

Random Assignment

A method used in experiments to equally distribute participants across different groups to minimize biases and ensure that the groups are comparable.