If the Marginal Propensity to Consume Is 0

question 101

Multiple Choice

If the marginal propensity to consume is 0.8 and the government reduces taxes by $5 billion, equilibrium income will

• A) fall by $20 billion.
• B) rise by $20 billion.
• C) fall by $25 billion.
• D) rise by $25 billion.

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Definitions:

Telling Style

A leadership approach where instructions are given directly and control is maintained by the leader.

Consideration

In leadership, the degree of empathy, respect, and support a leader provides to their team members.

Theory Y

A management concept developed by Douglas McGregor suggesting that workers are naturally motivated, responsible, and capable of self-direction and creativity at work.

Organizational Problems

Issues or barriers that impede a company's progress towards its goals, which can arise from internal inefficiencies, external pressures, or a combination of both.