Refer to the Following Figure to Answer the Following Questions

question 161

Multiple Choice

Refer to the following figure to answer the following questions.
-According to the figure,if the government increases spending by only $4 billion in an effort to shift aggregate demand enough to return to long-run equilibrium,the marginal propensity to consume must be equal to

• A) 0.75.
• B) 0.8.
• C) 1.33.
• D) 1.57.
• E) 0.6.

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Definitions:

Exporter

An individual or company that sells goods or services produced in one country to buyers in other countries.

Stock Ownerships

The possession of shares in a company, which represent a claim on the company's assets and earnings.

Potentially Higher Returns

The prospect of gaining returns on investment that exceed average or expected levels, often associated with higher risk.

Bonds

Fixed-income financial instruments that represent a loan made by an investor to a borrower, typically corporate or governmental, which is obliged to pay back with interest.