If the MPC Is 0

question 1

Multiple Choice

If the MPC is 0.8, what change in investment spending is required to effect a total change in income by $60 billion?

• A)$12 billion
• B)$15 billion
• C)$20 billion
• D)$25 billion

---

Definitions:

Simple Indicator

A quantitative measure that can be used to gauge or describe the performance or status of a particular phenomenon.

Sellers

Individuals or entities that offer goods or services for sale to buyers in the market.

Perfect Competition

A market structure characterized by a large number of small firms, identical products, and free entry and exit which leads to firms selling at the market price.

Demand Curves

Graphical representations showing the relationship between the price of a good and the quantity demanded, assuming other factors remain constant.