If the Marginal Propensity to Consume Is 0

question 171

Multiple Choice

If the marginal propensity to consume is 0.75,net taxes are fixed at $2,000 and real income rises by $12,000,by how much will real consumption spending increase?

• A) $9,000
• B) $8,000
• C) $7,500
• D) $7,000
• E) $10,000

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Definitions:

Project Management

The discipline of planning, executing, and overseeing resources to achieve specific goals within a defined timeline and budget.

Analytical Approach

A method of problem-solving or decision-making that involves breaking down a system into its components to understand its structure and dynamics.

Correlation Matrix

A table showing the correlation coefficients between variables, illustrating how changes in one variable are associated with changes in another.

Crystal Ball

In decision-making and forecasting, a metaphorical term used to describe the ability to predict future events or outcomes.