If the Marginal Propensity to Consume Is 4/5, Then a Decrease

question 139

True/False

If the marginal propensity to consume is 4/5, then a decrease in government spending of $1 billion decreases the demand for goods and services by $5 billion.

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Definitions:

Ending Inventory

The value of goods available for sale at the end of an accounting period.

Pen Sets

Writing instruments, such as pens, that are sold together as a set, often presented in a case or package.

FIFO Method

Stands for First In, First Out, an accounting method for valuing inventory where the oldest items in stock are sold or used first.

Ending Inventory

The final amount of products on hand at the close of an accounting period, reflecting the inventory that was not sold.