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:

Puzzlebox

A problem-solving device or situation used in experiments, often to study learning and problem-solving skills in animals.

Insight

A sudden realization of the solution to a problem, often associated with a deeper understanding of a situation or concept.

Unconditioned Response

An automatic, natural reaction to a stimulus that occurs without any prior learning or conditioning.

Metronome

A device used to mark time at a selected rate by giving a regular tick sound at adjustable intervals.