If the Marginal Propensity to Consume Is 0

question 184

Multiple Choice

If the marginal propensity to consume is 0.8, full-employment output is $14 trillion, and current output is $13.5 trillion, then investment spending must _____ to reach full-employment output.

• A) decrease by $0.5 trillion
• B) increase by $0.1 trillion
• C) increase by $0.4 trillion
• D) increase by $0.5 trillion

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Definitions:

Foramen Rotundum

An opening in the sphenoid bone of the skull through which the maxillary branch of the trigeminal nerve passes.

Neural Tube

The precursor to the central nervous system in vertebrates, developing into the brain and spinal cord.

Ventricles of the Brain

Cerebral cavities filled with cerebrospinal fluid that help protect the brain from injury and provide it nutrients.

Cerebrum

The largest part of the brain, responsible for voluntary muscular activity, vision, speech, taste, hearing, thought, and memory.