If Equilibrium Real GDP Demanded Rises from $4 Trillion to $6

question 1

Multiple Choice

If equilibrium real GDP demanded rises from $4 trillion to $6 trillion when government purchases increase by $1 trillion,how large is the marginal propensity to consume?

• A)0.8
• B)0.4
• C)0.5
• D)0.2
• E)2

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Definitions:

ANS

Autonomic Nervous System; a control system that acts largely unconsciously and regulates bodily functions such as the heart rate, digestion, respiratory rate, pupillary response, urination, and sexual arousal.

Involuntary Nervous System

Part of the peripheral nervous system that controls involuntary bodily functions, including those of the heart, digestive system, and respiratory system. It's also known as the autonomic nervous system.

Motor Neurons

Neurons that carry outgoing information from the central nervous system to muscles and glands, facilitating movement and action.

Bait Advertising

A deceptive marketing practice that involves advertising a product at a specific price or condition which is not genuinely offered to induce sales of another product.