If an Increase in Autonomous Consumption Spending of $10 Million

question 88

Multiple Choice

If an increase in autonomous consumption spending of $10 million results in a $50 million increase in equilibrium real GDP,then

• A)the MPC is 0.5.
• B)the MPC is 0.75.
• C)the MPC is 0.8.
• D)the MPC is 0.9.

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Definitions:

Cost-plus Pricing

is a pricing strategy where the selling price is determined by adding a specific markup to a product's cost.

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the cost of the investment.

Return on Investment

A measure of the profitability of an investment, calculated as the ratio of net profits to the initial cost of the investment.

Selling and Administrative Expenses

Costs not directly linked to the production process, including sales, marketing, management salaries, and office expenses.