In Econland Autonomous Consumption Equals 700, the Marginal Propensity to Consume

question 102

Multiple Choice

In Econland autonomous consumption equals 700, the marginal propensity to consume equals 0.80, net taxes are fixed at 50, planned investment is fixed at 100, government purchases are fixed at 100, and net exports are fixed at 40. Autonomous expenditure equals:

• A)990.
• B)940.
• C)900.
• D)890.

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Definitions:

Recessions

Periods of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Tax Code

The laws and regulations governing the taxation process in a country.

Saving

The portion of income not spent on consumption but rather set aside for future use or investment.

Time Inconsistency

The phenomenon where a decision-maker's preferences change over time, leading to choices that may not align with their long-term goals.