Suppose Consumer Confidence Declines and as a Result,consumer Spending Decreases

question 74

Multiple Choice

Suppose consumer confidence declines and as a result,consumer spending decreases by $4 billion dollars.Other things equal,if households spend $0.75 of each extra dollar of income and save the remaining $0.25,by how much will spending decrease during the third round through the circular flow?

• A) $1 billion
• B) $2.25 billion
• C) $3 billion
• D) $4 billion

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Definitions:

Minnesota Multiphasic Personality Inventory

A widely used psychological assessment tool that evaluates a variety of mental health issues and personality traits through self-report inventory.

B Data

Observational data about a person's behavior typically gathered in a natural environment.

Aggregation

The process of combining multiple pieces of data, information, or material to form a whole or summary.

Idiosyncrasies

Distinctive or peculiar features or characteristics of a person or thing, often related to behavior or habits.