If the Marginal Propensity to Consume (MPC) Is 0

question 60

True/False

If the marginal propensity to consume (MPC) is 0.80, the value of the spending multiplier is 2.

---

Definitions:

Book of Original Entry

The first place where financial transactions are recorded, including journals.

Journal Entry

A record in accounting that documents a business transaction, showing the accounts impacted and the amounts debited and credited.

Debit Account

A bookkeeping record that raises the value of an asset or expense, or lowers the value of a liability or equity.

Credit Account

A Credit Account is a type of financial account that records the amounts that are owed by a business to its suppliers or creditors, which are typically settled at a later date.