In Econland Autonomous Consumption Equals 700, the Marginal Propensity to Consume

question 112

Multiple Choice

In Econland autonomous consumption equals 700, the marginal propensity to consume equals 0.80, net taxes are fixed at 50, planned investment is fixed at 100, government purchases are fixed at 100, and net exports are fixed at 40. The slope of the expenditure line is:

• A)0.20.
• B)0.80.
• C)0.90.
• D)0.99.

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Definitions:

Planning

The process of setting goals, developing strategies, and outlining tasks and schedules to achieve those goals.

Operating Synergy

The increased efficiency or added value that results when two companies combine their operations.

Economies of Scales

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Restructuring

The process of restructuring a company's legal, ownership, operational, or other configurations to enhance its profitability or to better suit its current requirements.