If an Increase in Autonomous Consumption Spending of $25 Million

question 135

Multiple Choice

If an increase in autonomous consumption spending of $25 million results in a $100 million increase in equilibrium real GDP,then

• A)the MPC is 0.25.
• B)the MPC is 0.75.
• C)the MPC is 0.8.
• D)the MPC is 2.5.

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Definitions:

Demographic Transition View

A model explaining how changes in birth and death rates can affect the age and growth dynamics of a population over time.

Opportunity Costs

The value of the next best alternative that is foregone when a decision is made.

Underemployment

A situation in which workers are employed below their skill level or work fewer hours than they would prefer.