The Following Table Illustrates the Multiplier Process in a Private

question 133

Multiple Choice

The following table illustrates the multiplier process in a private closed economy:

-Refer to the above table.The marginal propensity to save is:

• A) .5.
• B) .25.
• C) .2.
• D) .1.

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Definitions:

Marginal Revenue Product

The additional revenue generated by employing one more unit of a factor of production, keeping all other factors constant.

Wage Rate

The amount of money workers are paid per unit of time, usually specified in terms of an hour, representing compensation for labor services.

Employment

The condition of having paid work or being engaged in a productive activity.

Marginal Revenue Product

The additional income produced by one more unit of input, such as labor or capital, in the production process.