If the Marginal Propensity to Consume Is 0

question 196

Multiple Choice

If the marginal propensity to consume is 0.6 and investment spending declines by $50 billion,by how much will equilibrium output change?

• A) -$125 billion
• B) -$83.3 billion
• C) -$50 billion
• D) $83.3 billion
• E) $125 billion

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Definitions:

3-Year Period

A specific timeframe that spans three consecutive years.

Post-secondary Education

Education that occurs after high school, including programs at colleges, universities, and technical schools.

Anticipate

To expect or predict something based on current knowledge or trends, often involving preparation for a known event or condition.

Compounded Semi-annually

The process of applying interest to an initial sum and the accrued interest on that sum every six months.