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:

Brokerage House

A financial institution that buys and sells securities, such as stocks and bonds, on behalf of clients while charging a commission for the service.

Joint Checking Account

A bank account shared by two or more individuals, typically allowing all holders equal access to funds.

Overdraft

A check written on a checking account in which there are insufficient funds to cover the amount of the check.

Joint-Account Owner

An individual who shares ownership and control over a bank account with one or more persons.