If the MPC Is 3/5 Then the Multiplier Is

question 33

Multiple Choice

If the MPC is 3/5 then the multiplier is

• A)4, so a $100 increase in government spending increases aggregate demand by $400.
• B)1.5, so a $100 increase in government spending increases output by $150.
• C)2.5, so a $100 increase in government spending increases aggregate demand by $250.
• D)1.67, so a $100 increase in government spending increases output by $166.67.

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Definitions:

Demanding

Requiring or calling for a significant amount of effort, skill, or attention.

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The understanding and actionable conclusions derived from analyzing data, often used to inform decisions or strategies.

Strategic Plans

Comprehensive documents or frameworks that outline an organization's long-term goals and the strategies to achieve them, including resource allocation.

Metrics

Quantitative measures used to assess, compare, and track performance or progress.