In a Simple, Private Economy, Suppose That the MPC Is

question 5

Multiple Choice

In a simple, private economy, suppose that the MPC is .8 and investment rises by $20 million.At the new equilibrium, how much will saving have increased?

• A)$8 million 
• B)$16 million 
• C)$20 million 
• D)$80 million 
• E)$100 million

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Definitions:

Job Costing System

An accounting system that tracks costs individually for each job, suitable for companies that produce unique products or jobs.

Direct Materials

Raw materials that are directly traced and are integral to the production of finished goods.

Direct Labor

The labor costs directly attributable to the production of goods or services.

Overhead Rate

The ratio used to allocate overhead costs to produced units, calculated by dividing total overheads by an allocation base like labor hours.