If Autonomous Consumption Rises by $60 And,as a Result,Real GDP

question 20

Multiple Choice

If autonomous consumption rises by $60 and,as a result,Real GDP rises by $240,then the marginal propensity to consume is

• A)0.25.
• B)0.75.
• C)0.05.
• D)0.95.
• E)none of the above

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Definitions:

Exchange Rates

The worth of a currency when exchanged for another currency.

Functional Currency

The currency of the primary economic environment in which an entity operates, usually determined by the currency that influences sales prices for goods and services.

Exchange Differences

Gains or losses resulting from the conversion of foreign currency transactions into the functional currency of a business.

Equity

The value of an owner's interest in a property, calculated by subtracting liabilities from the value of an asset.