If an Increase in Autonomous Consumption Spending of $10 Million

question 20

Multiple Choice

If an increase in autonomous consumption spending of $10 million results in a $50 million increase in equilibrium real GDP,then the MPC is

• A) 0.5.
• B) 0.9.
• C) 0.8.
• D) 0.75.

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Definitions:

Financial Statements

Summarized records of a company's financial activities and condition, including the balance sheet, income statement, statement of cash flows, and statement of retained earnings.

United Kingdom

A sovereign country located off the northwestern coast of mainland Europe, comprising England, Scotland, Wales, and Northern Ireland.

Prepaid Insurance

An asset account representing insurance payments made in advance, which are expensed over the term of the insurance coverage.

Income Statement

A financial document summarizing a company's revenues, expenses, and profit over a specific period, typically quarterly or annually.