If the Marginal Propensity to Consume Is Equal to 0

question 22

Multiple Choice

If the marginal propensity to consume is equal to 0.75,the spending multiplier is equal to

• A) 4.0.
• B) 1.75.
• C) 0.25.
• D) 0.57.
• E) 1.33.

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Definitions:

Reaction Tendencies

refers to habitual patterns of behavior, thought, or emotional response to particular situations or stimuli.

Structural Units

Basic components or building blocks that make up a structure, system, or complex entity.

Mental Elements

Fundamental components or aspects that make up the processes of the mind, such as thoughts, feelings, and attitudes.

Sentiments

Complex feelings that arise from attitudes, beliefs, and judgments, which influence how individuals perceive and interact with others.