Within the Keynesian Model, If the Marginal Propensity to Consume

question 25

Multiple Choice

Within the Keynesian model, if the marginal propensity to consume is 0.8, which of the following is true?

• A) When consumption increases by $5, income increases by $1.
• B) When consumption increases by $1, saving increases by $5.
• C) When investment increases by $1, income increases by $5.
• D) When investment increases by $1, saving increases by $5.

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Definitions:

Eutrophic

Describes water bodies rich in nutrients leading to dense plant life and algae growth, which can deplete oxygen levels and harm aquatic life.

Oligotrophic

Relates to bodies of water that have low nutrient levels and low productivity.

Algae

a diverse group of photosynthetic organisms that live in aquatic environments, ranging from unicellular microalgae to large seaweeds.

Rain Shadow

Leeward side (side sheltered from the wind) of a mountainous barrier, which receives much less precipitation than the windward side.