If Disposable Income Increases from $912 to $927 Billion and MPC

question 141

Multiple Choice

If disposable income increases from $912 to $927 billion and MPC = 0.6, then consumption will increase by

• A) $6 billion.
• B) $9 billion.
• C) $54 billion.
• D) $56 billion.

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Definitions:

Egocentrism

A cognitive bias characterized by the inability to differentiate between one's own perspective and another person's perspective.

Conservation

A principle in cognitive development where a child recognizes that quantity does not change with physical rearrangement.

Theory of Mind

The skill to recognize and assign mental states such as beliefs, intentions, desires, imaginings, and understanding to oneself and others, while also comprehending that others possess their own unique beliefs, desires, and intentions that may not align with one's personal views.

Object Permanence

The awareness that things still exist even if they are not currently being perceived through sight, hearing, touch, smell, or any other sensory method.