Suppose the Marginal Propensity to Consume (MPC)is 0

question 297

Multiple Choice

Suppose the marginal propensity to consume (MPC) is 0.8 and there is a $4,000 increase in planned investment. Given this information, real GDP will increase by

• A)$4,000.
• B)$20,000.
• C)$5,000.
• D)$2,000.

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Definitions:

N Th

Pertaining to an unspecified member of a sequence or series, representing a general or particular position.

Geometric Sequence

A series of numbers in which each subsequent term is derived by multiplying the term before it by a constant, non-zero figure referred to as the ratio.

Population

In statistics, population refers to the entire group of individuals or items that a study intends to investigate or draw conclusions from.

Rate

A ratio that measures how one quantity changes in relation to another.