If the Consumption Function Is C = 25

question 26

Multiple Choice

If the consumption function is C = 25 + .80 (disposable income) , what is the expenditure multiplier for the full potential expenditure multiplier effect?

• A) 25
• B) 1.25
• C) 31.25
• D) 5

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Definitions:

Self-Compassion

The act of showing compassion and empathy towards oneself during times of suffering or failure, instead of engaging in severe self-judgment.

Inadequate

Lacking the quality or quantity required; insufficient for a purpose.

Self-Serving Bias

The common tendency to attribute successes to personal characteristics and failures to external factors, often to maintain self-esteem.

Actor-Observer Effect

The tendency to make internal attributions for the behavior of others and external attributions for our own behavior.