If the Marginal Propensity to Consume (MPC) Is 0

question 53

Multiple Choice

If the marginal propensity to consume (MPC) is 0.75, and if the goal is to increase real GDP by $400 million, then by how much would government spending have to change to generate this increase in real GDP?

• A) $140 million.
• B) $100 million.
• C) $200 million.
• D) $400 million.

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Definitions:

Political Life

The sphere of activity related to the governance of a country or area, including the actions and policies of governmental organizations, political parties, and elected officials.

Pan-German Associations

Organizations that promoted the unification of all German-speaking peoples into one nation, influencing nationalist sentiment in the 19th and early 20th centuries.

National Union

A term that can refer to a political entity promoting national unity and interests, or a labor union representing workers from a particular country.

Prussia and Austria

Two major powers in central Europe which played pivotal roles in regional politics, military conflicts, and the shaping of the continent's history from the 18th to the early 20th centuries.