If an Initial Increase in Government Spending of $100 Billion

question 117

Multiple Choice

If an initial increase in government spending of $100 billion leads to a total increase of $400 billion in income,the marginal propensity to consume in the economy is:

• A) 0.4.
• B) -0.8.
• C) 0.5.
• D) 0.75.
• E) 0.8.

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Definitions:

Skeletal Muscle

A type of striated muscle tissue that is voluntarily controlled, responsible for movement of the skeleton.

Posture

The position or arrangement of the body and its limbs, either in motion or when standing still.

Breathing

Breathing is the physiological process of taking air into the lungs and expelling it, essential for respiration and oxygen intake.

Striated

Having a series of ridges, stripes, or lines, commonly referring to muscle tissue that appears striped under a microscope due to the arrangement of muscle fibers.