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:

Sales Proposal

A written offer from a seller to a prospective buyer, detailing the products or services offered and the terms under which the seller is willing to supply them.

Costs

The amount of money required for the production, acquisition, or maintenance of goods and services.

Business Proposal

A document designed to offer specific goods or services to a prospective client or partner.

Budget

An estimate of income and expenditure for a set period of time, often used as a plan for managing financial resources.