If the Marginal Propensity to Consume (MPC)is 0

question 372

Multiple Choice

If the marginal propensity to consume (MPC) is 0.8 and there is a desire to increase real GDP by $500 billion, then

• A)an increase in autonomous real consumption spending of $500 billion will generate this change.
• B)a decrease in autonomous real saving of $500 billion will generate this change.
• C)an increase in planned real investment spending of $200 billion will generate this change.
• D)an increase in real autonomous spending of $100 billion will generate this change.

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Definitions:

Worker Productivity

A measure of output per labor hour.

Fairness

The quality of being just, equitable, and impartial; often a subjective measure in economic and social contexts.

True Probability

The actual likelihood of an event occurring, often contrasted with estimated probabilities derived from models or assumptions.

Subjective Probabilities

The individual's personal judgment or estimate of the likelihood of an event occurring, based on their own knowledge and experience.