If Autonomous Investment Spending Falls by $1,000 and the Marginal

question 223

Multiple Choice

If autonomous investment spending falls by $1,000 and the marginal propensity to consume is 0.75, the total effect on the economy is a decrease of _____ in income or output.

• A) $750
• B) $1,000
• C) $4,000
• D) $7,500

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