If Investment Decreases by $20 Billion and the MPC Is

question 58

Multiple Choice

If investment decreases by $20 billion and the MPC is 0.8,what will the resulting decrease in the consumption component of AD be?

• A)$16 billion
• B)$4 billion
• C)$100 billion
• D)$80 billion

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Definitions:

Markets

Places or systems in which goods, services, and assets are exchanged, usually with prices determined by supply and demand.

Efficiently

Conducting an activity in such a manner that it achieves the maximum output with the minimum input or resources, without waste.

Rival

An entity competing against another for the same objective or for superiority in the same field of activity.

Excludable

A feature of a product or service enabling its owner to exclude others from usage unless payment is received.