If the MPC Is 0

question 24

Multiple Choice

If the MPC is 0.6 and there are no imports or income taxes, the multiplier is

• A) 1.7.
• B) 6.
• C) 0.4.
• D) 0.6.
• E) 2.5.

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Definitions:

Accrued Interest

Interest that has accumulated over time but has not yet been paid by the borrower.

Beneath Face Value

Refers to when a security is trading for less than its nominal or face value.

Premium on Bonds

The amount by which the price paid for a bond exceeds its face value, often due to interest rates being lower than the bond's coupon rate.

Interest Method

A technique used in accounting and finance to calculate the interest between periods based on principal, rate, and time.