If the MPC Is 0

question 83

Multiple Choice

If the MPC is 0.75, what must the spending multiplier be?

• A) 3
• B) 4
• C) 5
• D) 1.25

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Definitions:

Nash Equilibrium

A concept in game theory where no player can benefit by changing strategies while the other players keep theirs unchanged; it represents a state of mutual best responses.

Simultaneous Game

A strategic interaction where all participants make decisions or moves at the same time without knowledge of the others' choices.

Best Response

In game theory, the strategy that yields the highest payoff for a player, given the strategies chosen by other players.

Simultaneous Game

A strategic game in which all players make their moves at the same time, without knowledge of the other players' actions.