Assume That the MPC Is 0

question 43

Multiple Choice

Assume that the MPC is 0.85 and investment spending rises by $100 million.How much consumption spending will this generate in the second round of spending?

• A)$15 million
• B)$85 million
• C)$100 million
• D)$118 million
• E)$185 million

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Definitions:

Dependent Personality

A personality disorder marked by pervasive psychological dependence on others to meet emotional and physical needs.

Detachment Category

A classification in psychology used to describe a level of emotional disconnection from a person or situation.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a comprehensive classification of mental disorders published by the American Psychiatric Association.

Anxiousness

An emotion of concern, apprehension, or discomfort regarding an event whose result is not yet known.