In a Simple, Private Economy, Suppose That the MPC Is

question 38

Multiple Choice

In a simple, private economy, suppose that the MPC is 0.8 and investment rises by $20 million.At the new equilibrium, how much will saving have increased?

• A)$8 million
• B)$16 million
• C)$20 million
• D)$80 million
• E)$100 million

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Definitions:

Efficiently

Achieving maximum productivity with minimum wasted effort or expense, often related to the optimal use of resources.

Economic Growth

An increase in the production of economic goods and services, compared from one period of time to another. It can be measured in nominal or real terms, the latter of which is adjusted for inflation.

Unusual Circumstances

pertains to events or conditions that are not part of the normal course of events and often require special consideration or response.

Outboard Motors

Outboard motors are a type of propulsion system for boats, typically mounted on the outside of the hull, used to steer and power a vessel.