If Consumption Falls from $600 Billion to $575 Billion and the Marginal

question 219

Multiple Choice

If consumption falls from $600 billion to $575 billion and the marginal propensity to consume is 0.8, then equilibrium income will

• A) fall by $25 billion.
• B) fall by $125 billion.
• C) rise by $25 billion.
• D) rise by $125 billion.

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Definitions:

Prospect's Response

The reaction or feedback given by a potential customer after being approached with a product or service offer.

Boomerang Approach

A sales technique in which the seller turns objections into reasons why the customer should actually buy the product.

Type of Products

Categories or classifications of goods and services based on their characteristics, uses, or customers served.

Tact

The ability to communicate or engage in an action carefully and considerately, often to avoid causing offense or to influence a situation positively.