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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