If the Marginal Propensity to Consume Is 4/5,the Simple Multiplier

question 14

Multiple Choice

If the marginal propensity to consume is 4/5,the simple multiplier is

• A)1/6
• B)6
• C)5/6
• D)6/5
• E)5

---

Definitions:

Compensatory Decision-making

A decision-making process where individuals make choices by weighing the pros and cons of different options to compensate for weaker attributes by stronger ones.

Functional Fixedness

A cognitive bias that limits a person to use an object only in the way it is traditionally used, ignoring other possible uses.

Noncompensatory Modeling

A decision-making process where options are evaluated based on whether they meet predetermined criteria, without considering trade-offs between characteristics.

Insight

A sudden understanding or realization of a problem's solution, often coming unexpectedly after a period of contemplation or seeming like a spontaneous revelation.