Suppose the Marginal Propensity to Consume Is 4/5

question 29

Multiple Choice

Suppose the marginal propensity to consume is 4/5.What is the value of the simple multiplier?  

• A) 4/5 
• B) 5/4 
• C) 4 
• D) 5

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Definitions:

Financial Risk

The potential for losses due to factors affecting the overall financial market or specific securities within a portfolio.

EPS

Earnings Per Share represents the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company's profitability.

Breakeven Volume

The number of units that must be sold at a given price to cover all costs, with no profit or loss.

Variable Costs

Costs that change in proportion to the level of output or activity in a business.