An Expert Tells You That "You Can Catch a Cold

question 234

Multiple Choice

An expert tells you that "you can catch a cold by not wearing a coat when it is cold." You would

• A) accept his statement since you remember catching a cold after you forgot your coat.
• B) accept his statement because it is based on commonsense reasoning.
• C) ask him to list additional experts that support his theory.
• D) ask to see the empirical evidence that supports his theory.

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Definitions:

Marginal Propensity to Consume

The proportion of an increase in income that an individual or population spends on goods and services as opposed to saving.

MPC

Stands for Marginal Propensity to Consume, which measures the portion of additional income that an individual spends on consumption.

Multiplier Value

A factor that quantifies the impact of a change in some economic activity on the rest of the economy.

MPC (Marginal Propensity to Consume)

A measure of the change in consumption resulting from a change in income; specifically, the proportion of additional income that is spent on consumption.