If the Marginal Propensity to Save Is 0

question 45

Multiple Choice

If the marginal propensity to save is 0.2 in an economy, a $20 billion rise in investment spending will increase

• A) GDP by $120 billion.
• B) GDP by $20 billion.
• C) saving by $25 billion.
• D) consumption by $80 billion.

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Definitions:

Unconscious Conflicts

Hidden internal struggles that originate from childhood experiences and influence behavior and emotions.

Psychotherapist

A professional who treats mental health issues by talking with individuals, exploring emotional challenges, and offering coping strategies.

Freudian Interpretation

An approach in psychology that emphasizes unconscious processes and conflicts as key factors shaping personality and behavior.

REM Sleep

Rapid Eye Movement Sleep, a unique phase of sleep characterized by random rapid movement of the eyes, vivid dreams, and increased brain activity.