If Autonomous Consumption Rises by $0

question 6

Multiple Choice

If autonomous consumption rises by $0.8 trillion and the marginal propensity to consume (MPC) equals 3/4,the equilibrium level of output demanded will rise by

• A)$0.2 trillion
• B)$0.6 trillion
• C)$1.07 trillion
• D)$2.4 trillion
• E)$3.2 trillion

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Definitions:

Exponential Smoothing

A time series forecasting method for univariate data that applies decreasing weights to past observations.

Actual Demand

The real or observed demand for products or services in a market, as opposed to forecasted or theoretical demand.

Weighted Moving Average

A forecasting method that assigns different weights to historical data points, prioritizing more recent data in the calculation.

Previous Month's Demand

Previous Month's Demand refers to the quantity of products or services requested by customers during the preceding month.