When Households' Marginal Propensity to Consume (MPC) Increases, the Size

question 184

Multiple Choice

When households' marginal propensity to consume (MPC) increases, the size of the spending multiplier:

• A) also increases.
• B) decreases.
• C) remains unchanged.
• D) reacts unpredictably.

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Definitions:

Quadratic Equation

An equation of the form ax^2 + bx + c = 0, where a, b, and c are constants, and a is not equal to 0.

Real Solutions

Real solutions refer to solutions of equations that are real numbers, not involving imaginary or complex numbers.

Quadratic Form

An expression in which the highest power of variables is squared, typically written in the form ax^2 + bx + c.

Square Root Property

A principle stating that for any positive number x, there exists a positive and negative value whose square equals x.