If a Consumer Spends £80 Out of an Extra £200

question 10

Multiple Choice

If a consumer spends £80 out of an extra £200:

• A) The average propensity to consume is 0.8.
• B) The marginal propensity to consume is 0.4.
• C) The multiplier is 10.
• D) The deflationary gap is £120.

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