If the Marginal Propensity to Consume Is 0

question 181

Multiple Choice

If the marginal propensity to consume is 0.75 and investment spending increases by $200 billion,by how much will equilibrium output increase?

• A) $350 billion
• B) $150 billion
• C) $200 billion
• D) $266.7 billion
• E) $800 billion

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Definitions:

Irrevocable Right

A legal entitlement or authority that cannot be revoked, altered, or undone once it has been granted or established.

License

A revocable right to use another’s property temporarily.

Real Property

Land and anything permanently attached to it, such as buildings or trees.

Mineral Rights

Refers to the ownership rights related to the natural resources located below the surface of the land, such as oil, gas, and minerals.