If Autonomous Consumption Rises by $70 And,as a Result,Real GDP

question 74

Multiple Choice

If autonomous consumption rises by $70 and,as a result,Real GDP rises by $350,then the marginal propensity to consume is

• A) 0.20.
• B) 0.80.
• C) 0.25.
• D) 0.75.
• E) none of the above

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Definitions:

Complements

Goods or services that are often used together such that an increase in demand for one leads to an increase in demand for the other.

Equilibrium Price

The cost at which consumer demand for a product matches the amount manufacturers are willing to supply.

Equilibrium Quantity

The volume of commodities or services provided and required at the price where supply equals demand.

Technology Improvements

Enhancements and advancements in various technological fields that lead to better efficiency, productivity, or utility.