In the Short-Run Keynesian Model Where the Marginal Propensity to Consume

question 63

Multiple Choice

In the short-run Keynesian model where the marginal propensity to consume is 0.5, to offset a recessionary gap resulting from a $1 billion decrease in autonomous consumption, government purchases must be:

• A) increased by $1 billion.
• B) decreased by $1 billion.
• C) increased by $0.5 billion.
• D) increased by $2 billion.

Identify methods to enhance readability and visual appeal in business documents.

Learn strategies for effective sentence construction to enhance clarity and brevity.

Understand the role of proofreading in ensuring the accuracy and professionalism of a document.

Distinguish between effective and ineffective design and formatting choices in business writing.

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Definitions:

Fixed Costs Per Unit

The fixed costs associated with a product divided by the number of units produced, highlighting how these costs dilute with increased production.

Joint Products

A scenario in production where a single process yields multiple products simultaneously.

Split-Off Point

The stage in a production process where joint products can be recognized as separate products.

Constant Gross Margin Method

A pricing strategy where the gross margin percentage is kept constant despite variations in product costs.