If the Marginal Propensity to Consume (MPC) Is 0

question 85

Multiple Choice

If the marginal propensity to consume (MPC) is 0.50, the value of the spending multiplier is:

• A) 5.
• B) 1.
• C) 2.
• D) 5

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Definitions:

Compounded Monthly

Interest calculation method where both the initial principal and the accumulated interest are recalculated every month.

Economic Values

The monetary worth of goods, services, or resources based on their utility and their capacity to satisfy wants or needs.

Wage Increase

An upward adjustment in the pay that employees receive for their work.

Deferred Annuity

An insurance contract designed to generate regular payments starting at a future date, often used as a retirement investment.