Use Ordinary Interest

question 83

Short Answer

Use ordinary interest:
$$\begin{array} { | l | l | l | l | l | l | l | } \hline & \text { Interest } & \text { Date } & \text { Date } & & \text { Simple } & \text { Amount Paid } \\\text { Principal } & \text { Rate } & \text { Borrowed } & \text { Repaid } & \text { Time } & \text { Interest } & \text { Back } \\\hline \$ 8,000 & 12 \% & \text { May 5 } & \text { Aug 10 } & \text { A } & \text { B } & \text { C } \\\hline\end{array}$$

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Definitions:

Full Employment

A situation in an economy where all available labor resources are being used in the most efficient way, typically with only natural unemployment remaining.

Marginal Propensity

Measures the portion of additional income that an individual or entity spends on consuming goods rather than saving.

Multiplier

The ratio of the change in an endogenous variable to the change in an exogenous variable it is dependent on, often used in the context of fiscal policy’s effect on the economy.

MPC

Stands for Marginal Propensity to Consume, indicating the proportion of additional income that is spent on consumption.