A Decrease in Autonomous Investment of $100 That Occurs When

question 140

Multiple Choice

A decrease in autonomous investment of $100 that occurs when the marginal propensity to save (MPS) equals 0.25 will lead to a decrease in real Gross Domestic Product (GDP) of

• A)$25.
• B)$100.
• C)$400.
• D)$800.

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Definitions:

Stockholders

Individuals or entities that own shares in a corporation, granting them certain rights such as voting on corporate matters.

Financing Source

Any mechanism or method through which an entity obtains funds to finance its operations, projects, or investments.

Banks

Banks are financial institutions licensed to receive deposits, offer loans, and provide various financial services, including currency exchange, wealth management, and safe deposit boxes.